In North America, Supply-Chain, Vehicle-Delivery Concerns Grow after Quake Devastation Struck Japan

Quake Devastation

There is an increased possibility for North American automakers to face parts shortages due to devastation in Japan.

Assessment teams on both sides of the Pacific suspects that parts shortages will soon become a reality. As a result some automakers immediately trimmed overtime production to conserve parts.

Mike Goss, spokesman for Toyota’s North American manufacturing operations said, “The company was confident about the working condition of it Tier 1 supply base, but personnel were assessing the situation among Tier 2 and Tier 3 supplier in Japan.”

Subaru’s parent, Fuji Heavy Industries, relies on Japanese plants for all its transmissions and six-cylinder engines. “We just don’t know yet impact we will see,” said Tom Easterday, executive vice president of Subaru on Indiana Automotive Inc. “Right now, it’s production as usual. But it takes about a week for the parts flow to reach us from Japan. So it will be next week before we see any effect.”

A report issued by IHS Global Insight analyst Paul Newton said: “The ripple effect of the stoppages to supply and production in Japan will be felt in many parts of the world, including the United States, China and Europe, as many key parts and technology are exported to global operations from Japan.”

Another cause for concern is the damaged nuclear power plant in Fukushima, Japan, which leaves a gaping hole in the power grid that serves Japan’s heavily concentrated population. As a result many of Japan’s automakers have stopped auto production at several plants to conserve the region’s power, which could affect some vehicles deliveries like Nissan all-electric Leaf, GT-R, 370Z, Lexus and Infiniti to North American retailers.

Detroit’s automakers also rely on Japanese suppliers for some critical parts. Ford is particularly concerned about hybrid battery supplies. “We have not had any supply disruption at this point,” Ford spokesman Todd Nissen said today. “But like the rest of the supply base, Sanyo is continuing to assess the situation.”

General Motors and Chrysler Group said they had not lost production because of the earthquake and tsunami but are monitoring the situation with supplies.

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