Monday 18 December 2017

Toyota scales back in US as disasters hit supplies

Stephen Foley in New York

Toyota has told workers at its car plants in the US that they will have their hours cut and may even be sent home, as the effects of the Japanese earthquake and tsunami ripple through the global manufacturing supply chain.

A shortage of imported parts prompted Toyota to say it will probably idle its pick-up truck production lines in San Antonio, Texas, while other US plants have also been told to expect disruption.

And other car manufacturers, too, are planning to scale back production while Japan's industrial base struggles to recover from the damage inflicted by the disaster two weeks ago and the ongoing disruption from power outages across the country.

HIS Automotive, an industry research firm, predicted yesterday that global vehicle production could tumble as much as 30pc if Japanese factories do not come back online by the end of April.

The crisis is particularly acute in Japan's domestic car industry. Honda said it did not expect to reopen its two closed Japanese plants until at least 3 April, because it needs parts from more than 100 suppliers who are based in the earthquake zone and there is no clarity yet on when these firms may be able to restart operations.

Toyota said its plants in Japan would remain shut into next week, though it expects to restart production of three hybrid vehicles there on 28 March.

The disruption has had knock-on effects through the global supply chain for car makers, particularly given the concentration in Japan of suppliers of critical electronic and transmission components.

Toyota told its employees and dealers in the US to expect a slowdown in North American production that could affect the number of cars available for sale in future months, but it was unable to say yet how long the slowdown would be, or how sharp. It has ended overtime and Saturday working, "as a precaution" to preserve parts, the company said.

Toyota's spokesman at its San Antonio plant said: "We are informing our team members that, with the situation over in Japan, it is likely that we will see some non-production days coming. At this point, we are still not sure of when those might hit, or if they do it, what the duration may be."

Market research firms reported that Toyota dealers have scrapped discounts, sending the typical price of the Prius up by $2,000 (€1,411) in some cases. Non-Japanese car makers are also being affected. General Motors has already temporarily idled a pick-up truck assembly line in Louisiana.

Independent News Service

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business