Chrysler LLC’s Chapter 11 bankruptcy filing has ended the guessing game on the future of the Big Three automaker, but Japan’s automakers are now wondering how badly the event will impact their parts makers.

Chrysler’s bankruptcy will “definitely be a negative for the broader U.S. economy as well as the Japanese automakers and auto parts makers that are supplying Chrysler,” said Satoshi Aoki, chairman of the Japan Automobile Manufacturers Association and Honda Motor Co., during a recent news conference.

Separately, Honda Executive Vice President Koichi Kondo said he was concerned the failure would “chill consumer sentiment.”

After 11th-hour negotiations to strike a deal with creditors failed, U.S. President Barack Obama announced the Chapter 11 bankruptcy filing, the first by a Big Three automaker, on Thursday, the government’s restructuring deadline.

Chrysler’s failure has raised concerns it will lead to massive job losses and trigger a chain reaction of bankruptcies in auto parts makers and suppliers.

“Simply put, Chrysler entering the Chapter 11 proceedings gives the automaker a bad image to consumers and this will translate to reduced production and a dent in profits,” said Arifumi Yoshida, an auto parts analyst with Nikko Citigroup Ltd.

Some auto parts firms have voiced concern the bankruptcy may lead to the loss of several tens of billions of yen worth of business.

According to the latest statistics from the Japan Auto Parts Industries Association, about 290 Japan-affiliated auto parts makers were operating in the United States in 2007, chalking up gross sales of roughly ¥3.5 trillion.

Takehide Takahashi, the JAPIA’s vice chairman and executive managing director, said he couldn’t provide an overall picture of how the country’s auto parts industry will be affected by Chrysler’s bankruptcy because the impact will vary from company to company.

Takahashi said companies have been taking steps to minimize the damage from such a scenario since last year. Nevertheless, the “complex correlation” in the network of automakers and auto parts makers means almost certain damage for Japanese manufacturers.

“What we cannot calculate beforehand is the magnitude of how it will impact the entire system (from here on),” he said.

Since the Chrysler issue is not an isolated problem for the United States, the Canadian government has agreed to provide financial support to the carmaker, which like other U.S. automakers runs plants in Canada.

But Japanese government officials and industry players downplayed the significance of the bankruptcy, saying that its impact is likely to be “limited” because steps have already been taken to cushion the impact and the collapse has already been factored in.

Finance Minister Kaoru Yosano said the impact from Chrysler’s failure will be “extremely small,” thanks to the financial support obtained from the Canadian and U.S. governments.

Also, Japanese firms have applied for a U.S. Treasury Department program unveiled in April to support auto parts suppliers. The program involves guaranteeing receivables owed by Chrysler and General Motors Corp. to suppliers in exchange for a small fee payable to the U.S. government.

To date, six Japanese firms have applied for the program. Among them are Yazaki Corp., which supplies GM and Chrysler with wire harnesses and indicators, and electronics maker Mitsubishi Electric Corp., which supplies generators and engine starters to Chrysler and does business with GM.

Yasuaki Iwamoto, an auto analyst at Okasan Securities Co., welcomed the program as a sure factor to “soften the blow.”

“The bankruptcy itself will be a mild one since it will be supervised by the government, and it does not mean that there is a sudden halt in production lines,” he added.

In unveiling the bankruptcy filing, Obama struck an optimistic chord, saying the bankruptcy process was “not a sign of weakness but rather one more step on a clearly chartered path to Chrysler’s revival.”

Filing for Chapter 11 makes it easier for Chrysler to restructure its dealerships.

As the curtain closed on Chrysler, the auto industry and market players are now shifting attention to GM, the other ailing Big Three member. GM’s restructuring deadline is June 1.

“After Chrysler’s filing for Chapter 11, the Tokyo stock market did not collapse, and this may give a sense of assurance that even if GM ultimately decides like Chrysler, things will turn out just fine,” Yoshida said.

But whether that optimism will continue or taper off remains uncertain amid the global slump, which has hurt overall U.S. consumption.

“Ultimately, what everyone is interested in seeing is whether U.S. consumers will start buying cars and what kind of cars will be sought by consumers,” Takahashi of the JAPIA said. “Naturally, when cars are not bought, there’s no business for auto parts firms.”

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