‘Little Clowns’ Find Happytown Outside Japan : Korea, Brazil Among Countries Drawing Animation Work as Yen Grows Stronger

No one seems immune these days from economic pressure, not even the Muppet Babies, G.I. Joe or Little Clowns of Happytown.

These stars of the Saturday morning cartoon scene have been hard hit by the dollar’s steep decline, particularly against the Japanese yen. A good deal of the animation work for U.S. cartoons for television has been done in Japan, but now American companies like Marvel Productions of Van Nuys are prowling other parts of Asia for cheaper alternatives.

“The major trend now, because of the yen strengthening so vastly, is to go out of Japan,” explains Margaret Loesch, president and chief executive of Marvel, which produces Muppet Babies, Fraggle Rock, G.I. Joe and Little Clowns of Happytown. “Korea has benefited, as well as other studios in Taiwan and the Philippines. We are now investigating other areas of the Orient. There is a constant effort to find economical animation.”

Until this year, about 75% to 80% of Marvel’s production work came out of Japan. “We’ve pulled three-quarters of our work out of Japan and put it in the Philippines and Korea,” said Loesch, adding that the company also sends work to Brazil and is considering Malaysia, Thailand and Australia.

U.S. animators began their emigration to Japan from North Hollywood--the center of the U.S. animation industry--about 10 years ago because labor-intensive, technical tasks like inking and painting could be done cheaper by production houses such as Toei Animation and Tokyo Movie Shinsha.

In most cases, however, the writing, designing, directing, development of story boards and post-production work generally is done in the United States.

Since February, 1985, when the yen began its dramatic rise against the dollar, U.S. cartoon companies have faced prohibitive increases in overseas production costs. “This yen valuation going up, it kicked everybody in the butt,” says Fred Wolf of Murakami Wolf Swenson Inc. in Hollywood.

If Marvel, for example, continued to use its Japanese sources, its overseas costs alone would have risen $30,000 to $50,000 per half hour show, according to Loesch.

Adds Wolf: “When you start to think 13 shows at a clip, or in some cases 65, that 40% factor (the dollar’s drop) turns into millions and millions of dollars.”

Hanna-Barbera, whose work continues unchanged in Japan, has moved into Poland and the Philippines mostly because of a big workload, according to a spokeswoman. But at the same time, she added, the company is trying to bring back some production to the United States--to a computer, that is. About 30% of the Hollywood company’s cartoon production this year has been done with computer-assisted coloring and camera work systems in the United States.

To stay competitive, Japanese animation houses are attempting to be more flexible. “The Japanese want us back, and we say, ‘How is that possible?’ So we’ll go to the bargaining table,” Loesch says.

In at least one case, the Japanese are keeping work by subcontracting some tasks out to another Asian country. Wolf, for example, is working with Toei on a new syndicated cartoon series.

“They managed to keep prices competitive and I’m fully aware that 60% of the work is done in Korea with Japanese supervision. What I gain is the comfort level of working with a well-established Japanese company without risk of working with Korea directly, because Korea has not shown me, or many others, production stability and consistency.”

Indeed, work returning from overseas still needs some touching up. “A lot of our employment for years and years has been doing corrections from overseas production,” says Bud Hester of the Motion Picture Screen Cartoonists Union, whose membership is down to 1,250 from more than 1,600 four years ago.