December 26, 2008 / 7:39 AM / in 9 years

Auto industry gloom crushing Japan's poor recyclers

TOKYO (Reuters Life!) - Thousands of miles away from Detroit, homeless people in Japan are feeling the pinch from the U.S. “Big Three” automakers’ financial woes, as they now receive less cash for the aluminum cans they collect to eke a living.

<p>A man sells aluminium cans at an aluminium recycling factory in Kawasaki, south of Tokyo, December 10, 2008. REUTERS/Yuriko Nakao</p>

Prices for aluminum, a metal used extensively in car manufacturing, have nosedived almost 60 percent since hitting records in July due to a slump in demand caused by the global economic recession, which has seen the finances of General Motors, Chrysler and Ford falter.

At home, Toyota is also forecasting its first ever consolidated operating loss due to lower demand.

The dozens of homeless collectors of Kawasaki City, just south of Tokyo, have been hit hard by these falling aluminum prices, as they now get less than half the money they used to two months ago selling cans to recycling factories.

Japan recycles more than 90 percent of aluminum cans -- one of the highest recycling rates in the world -- and the industry is worth some 45 million yen ($493,000), according to the Japan Aluminum Can Recycling Association.

Of the total 300,000 metric tons of aluminum collected every year, some 10 percent is gathered by the homeless, the association added.

Every morning, homeless people bike around Kawasaki City to snatch discarded cans left outside residences before garbage trucks arrive to pick them up.

Kazutoshi Kimura, 56, spends almost 10 hours every day on the road, collecting cans and biking for miles to trade them for cash at the aluminum recycling factories.

The former chef has collected cans for 11 years while living by the river, but says times are now tougher than ever before.

“Before I would get about 4,000 yen ($44) for the cans I collected each day and I would work four days a week. But now, I have to work every day to survive because I only get 1,800 yen ($20) for the same amount of cans,” said the homeless man, adding that he’s been living off cheap ramen noodles.

DIM PROSPECTS

<p>A man parks his bicycle carrying loads of aluminium cans which he collected for his living in Kawasaki, south of Tokyo, December 10, 2008. REUTERS/Yuriko Nakao</p>

Until October, aluminum recycling factories would buy 1 kg (2 lb) of cans collected, or about 1,000 cans, for 190 yen ($2).

But they’ve cut the price down to 90 yen ($1) since the global price drop and the slump in the auto industry.

Hidemi Tanaka, 35, a night-time cleaning worker who’s collecting cans during the day for a second income, says the work doesn’t pay off anymore.

“Even elementary school kids wouldn’t appreciate this,” said Tanaka after she exchanged 18 kgs of cans for 1,620 yen ($18).

Slideshow (8 Images)

Noritaka Akura of the Japan Aluminum Can Recycling Association said he was worried that these prices would discourage recycling, and increase waste.

“I‘m sure people will continue recycling aluminum cans, but with the prices falling this low, people may get less motivated to do so. That’s what we worry about,” he said.

Alternative work for these homeless collectors may be hard to find in these gloomy economic times.

In Nagoya city in central Japan, near Toyota’s hometown, more homeless people are lining up for food handouts as they earn less for collecting aluminum cans.

“They need to come here as they can no longer buy their own food,” said Masashi Hayashi, an organizer for the handouts.

Japan’s economy is in recession and analysts predict this slowdown may be perhaps the longest on record, as global demand for Japanese cars and technology dries up.

The jobless rate is still at an enviable -- by Western standards -- 3.9 percent, but according to the Ministry of Health, Labor and Welfare, about 85,000 contract workers will be laid off across the country between October 2008 and March 2009.

($1=91.28 Yen)

Additional reporting by Yoko Nishikawa in Nagoya, Editing by Miral Fahmy

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