FOR more than 20 years, Machiko Sakakibara and her husband have run a brisk business trimming the hair of Toyota employees at their shop in the shadow of the Japanese car giant's headquarters.
But just as Toyota's business has plummeted, so have the number of customers for this 65-year-old grandmother's barber shop. On the street outside she can point to half a dozen other shops that have closed for lack of business – a clothing shop, a su
permarket, a vegetable seller.
In a city where every block has a building bearing the name Toyota, the car maker's first-ever recorded losses have led to unprecedented hard times.
"If Toyota gets a cold, everyone else gets pneumonia," Ms Sakakibara said. "People are trying to maintain an even keel but even when you can't see the effects physically, you can feel it."
Japan's economy is in recession, its exports plummeting – 40.9 per cent year-on-year in May alone – and domestic demand for cars has also fallen, leading to hard times for Toyota City, a city of 420,000 which had its name changed from the original Koromo in honour of the car manufacturer in 1959.
Toyota has so far spared its full-time workforce of 72,000 but has cut its temporary workers by more than two-thirds to about 3,000.
Shops are closing, homes are being put up for sale. And at the town's unemployment centre, cheerfully named the Hello Work centre, there are five applicants for every job – two and a half times the national average.
Inside, harried manager Masami Kawajiri is doubling as a receptionist to handle the influx, about 2,000 people a day, which is about double last year's demand. "In the past, it's always been up and down, but in the down times you could always see what's ahead. This time, no one can see what's coming," he said.
Outside, Takuma Akasako contemplates another day of scanning job listings without success. "I'm worried about my rent," said the 24-year-old, who moved to the booming city from Osaka three years ago for the promise of good wages. "I had no idea this could happen to Toyota. I had an image of Toyota as a very strong company."
"This is the first time Toyota has ever been in the red, ever, so this is the first time we have ever experienced this as a community," said Toru Niimi, a spokesman for the city council. The municipality has seen corporate tax revenue drop 90 per cent, and is drastically cutting spending on roads and buildings to divert money into emergency housing and job-creation programmes.
"We all thought there couldn't be a strong growth trajectory forever. But that it would hit now, and so deeply, that's what people didn't expect," Mr Niimi said.
Toyota City has one hopeful sign to cling to: the continued success of Toyota's hybrid fuel Prius. The only plant still running at capacity, it has struggled to keep up with world demand for the car and from the unemployment lines to the struggling city finance officials, there are whispers of hope that it holds the key to Toyota's recovery.
