The Truth About Cars » parts paralysis http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 07 Dec 2014 13:37:29 +0000 en-US hourly 1 http://wordpress.org/?v=4.0.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » parts paralysis http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com CDT Cartastrophe: No Quick Fix In Sight http://www.thetruthaboutcars.com/2012/04/cdt-cartastrophe-no-quick-fix-in-sight/ http://www.thetruthaboutcars.com/2012/04/cdt-cartastrophe-no-quick-fix-in-sight/#comments Thu, 19 Apr 2012 13:22:39 +0000 http://www.thetruthaboutcars.com/?p=440840 Officially, carmakers around the world are putting on their best “what me worry” faces and say that they are unaffected by a sudden shortage of a key component, caused by a factory explosion in Germany. Behind closed doors, they are freaking out. Carmakers and suppliers met in Detroit for an emergency summit under the auspices […]

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Officially, carmakers around the world are putting on their best “what me worry” faces and say that they are unaffected by a sudden shortage of a key component, caused by a factory explosion in Germany. Behind closed doors, they are freaking out. Carmakers and suppliers met in Detroit for an emergency summit under the auspices of the Automotive Industry Action Group (AIGP). After the meeting, the first admissions of impending doom surfaced.

In a statement issued after the meeting, AIGP said:

“It is now clear that a significant portion of the global production capacity of PA-12 (nylon 12) has been compromised. In the automotive industry, PA-12 is used pervasively in coatings and connector applications for fuel handling and braking systems. These are highly engineered products produced via very complex manufacturing processes.”

Cyclododecatriene, or CDT, is an vital ingredient in the manufacture of resin that is used in essential automotive components, such as brake and fuel lines. Researcher IHS said in a comment after the meeting:

“The impression is that this is very much a rapidly developing situation and the full implications of the stoppage of CDT production has yet to be properly understood. However, the rapid response of the US industry suggests that problem is serious and has no easy or quick fix.

 If suitable alternative materials already existed, they would already be in widespread use and there would be no discussion of a crisis. How easy it will be to find an alternative resin that does not use CDT is open to some conjecture. Given the component testing and approval processes employed by the OEMs and Tier 1 suppliers, it is unlikely to be the work of a moment to find or develop a substitutable alternative material.”

In other words, as noted yesterday, while it can take several months for CDT production to be restored, looking for a replacement will most likely take longer. Even DuPont, supplier of replacement candidate polyphthalamide (PPA) is careful. DuPont spokesperson Carole Davies said:

“We’re working very closely with our customers to understand the issue and where we have materials that can help. There are a number of solutions that automakers are looking at. There are other materials that some automakers use, some don’t. It’s just a matter of finding alternatives that work, getting them qualified and, hopefully, they’ll be enough at the end of the day to get everyone through it.”

Participants of the AIGP meeting characterized the mood as “extremely serious.” They noted “significant concern over the potential for production disruptions in the component industry, with obvious knock-on effects for the OEMs.” The other worry: The material is not used exclusively by the automotive sector. Demand from other manufacturing industries could trigger a run on the ersatz-CDT, if and when it has been found.

 

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Maker Of Strategic Material May Be Down For Months, Shortages To Last Longer http://www.thetruthaboutcars.com/2012/04/maker-of-strategic-material-may-be-down-for-months-shortages-to-last-longer/ http://www.thetruthaboutcars.com/2012/04/maker-of-strategic-material-may-be-down-for-months-shortages-to-last-longer/#comments Wed, 18 Apr 2012 14:00:00 +0000 http://www.thetruthaboutcars.com/?p=440518 Evonik Industries told Reuters that it will take at least three months for its damaged chemical plant in Marl, Germany, to resume normal production of CDT, and that full production of CDT may not return until the beginning of next winter. CDT is a base ingredient for the production of  nylon resin PA-12. That resin […]

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Evonik Industries told Reuters that it will take at least three months for its damaged chemical plant in Marl, Germany, to resume normal production of CDT, and that full production of CDT may not return until the beginning of next winter.

CDT is a base ingredient for the production of  nylon resin PA-12. That resin is used as a coating on fuel and braking systems on most passenger cars worldwide. Evonik is the world’s leading maker of cyclododecatriene.

According to Automobile Magazine, the tight supply of Cyclododecatriene  had been known for several years. Evonik was planning on adding capacity in Asia, but that factory won’t be ready until the end of 2014.

With several weeks of supply in the pipeline to U.S. and Asian makers, “disruptions will likely start in Europe,” said Rod Lache, an analyst for Deutsche Bank AG. Once stockpiles are used up, shortages are estimated to last about six to nine months.

Evonik is not the only manufacturer of CDT as some commenters noted, but is the world’s biggest. DuPont currently supplies Fiat with fuel lines made from its own specialty polymers that do not contain CDT. Evonik told Reuters that it is looking into alternative materials that can be used as a resin without CDT.

However, suppliers and especially materials cannot be switched at will. Neil De Koker, president of the Original Equipment Suppliers Association told Bloomberg:

“Brake lines and fuel lines are safety products, so you don’t make changes overnight. You have to do them very carefully with the right testing to prove out the product.”

Testing and certification of safety products such as fuel and brake lines can take many months. This is a process the industry does not want to rush. When Renesas, a supplier of chips for on-board electronics, had a fab wiped out by the tsunami, automakers found themselves in a similar situation. Renesas is not the only chipmaker. Chips can be changed. However re-engineering and re-certification of systems would have taken longer than simply waiting for the fab to resume production.

 

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Factory Explosion Threatens World’s Car Industry http://www.thetruthaboutcars.com/2012/04/factory-explosion-threatens-worlds-car-industry/ http://www.thetruthaboutcars.com/2012/04/factory-explosion-threatens-worlds-car-industry/#comments Sat, 14 Apr 2012 09:56:44 +0000 http://www.thetruthaboutcars.com/?p=439917 A huge explosion in an industrial park in Marl, Germany, killed two. It also could bring the world’s auto industry to its knees “in the next few weeks,” writes Bloomberg. The explosion destroyed production facilities of an obscure chemical called Cyclododecatriene. CDT is a key element of PA-12, a resin used in most fuel and […]

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A huge explosion in an industrial park in Marl, Germany, killed two. It also could bring the world’s auto industry to its knees “in the next few weeks,” writes Bloomberg.

The explosion destroyed production facilities of an obscure chemical called Cyclododecatriene. CDT is a key element of PA-12, a resin used in most fuel and brake-line coatings, flexible hoses and quick connectors supplied to automakers. A few days ago, TI Automotive of Auburn Hills, Michigan, wrote to customers:

“The shortage is real and immediate. The possibility of production interruptions at some of your facilities in the next few weeks is high.”

TI Automotive supplies brake and fuel lines, fuel tanks and pumps to all major automakers, including GM, Ford, Toyota, and Volkswagen. Its customer list reads like a who’s who of the auto industry.

Automakers are aware of the situation but have not reported any outages.

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Japanese Parts Paralysis, Take 2 http://www.thetruthaboutcars.com/2011/08/japanese-parts-paralysis-take-2/ http://www.thetruthaboutcars.com/2011/08/japanese-parts-paralysis-take-2/#comments Mon, 29 Aug 2011 09:23:58 +0000 http://www.thetruthaboutcars.com/?p=409096 Now that the effects of the March 11 tsunami are behind the Japanese auto industry, carmakers are pulling out all stops to make up for lost volume. Only to run into new problems: “Shortages of tires and other autoparts are a growing concern,” reports The Nikkei [sub]. The new shortage is tsunami-unrelated. Its reason: Bad […]

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Now that the effects of the March 11 tsunami are behind the Japanese auto industry, carmakers are pulling out all stops to make up for lost volume. Only to run into new problems: “Shortages of tires and other autoparts are a growing concern,” reports The Nikkei [sub]. The new shortage is tsunami-unrelated. Its reason: Bad old supply and demand.

According to The Nikkei, Bridgestone has notified automakers that the company has more orders for car tires than it has capacity. Bridgestone thinks it will be short 500,000 tires, that’s 100,000 cars missing from the production stats.

Japan Polypropylene has trouble keeping up with demand for resins used for plastic autoparts.

Also short: Workers. Automakers continue having problems finding enough temporary workers, to help out with the great production surge.

 

 

 

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Japanese Auto Industry Loses 1.4 Million Units – Nissan Walks Away Unharmed http://www.thetruthaboutcars.com/2011/07/japanese-auto-industry-loses-1-4-million-units-%e2%80%93-nissan-walks-away-unharmed/ http://www.thetruthaboutcars.com/2011/07/japanese-auto-industry-loses-1-4-million-units-%e2%80%93-nissan-walks-away-unharmed/#comments Mon, 25 Jul 2011 13:22:20 +0000 http://www.thetruthaboutcars.com/?p=404165 Today is the day when the Japanese majors announce domestic and global data for June and the half year. A little more than three months ago, a massive earthquake, followed by a devastating tsunami, paralyzed much of Japan’s infrastructure. It could not have come at a more inopportune time. The Japanese auto industry was already […]

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Today is the day when the Japanese majors announce domestic and global data for June and the half year. A little more than three months ago, a massive earthquake, followed by a devastating tsunami, paralyzed much of Japan’s infrastructure. It could not have come at a more inopportune time. The Japanese auto industry was already suffering from weak markets at home and abroad, paired with a rising yen that destroyed profits from exports.  Three months later, how big was the hit?

Japanese and overseas output, June

Manufacturer Domestic Change Overseas Change Exports Change

Toyota
Group
320,452 -12.6% 360,516 3.3% 135,254 -20.2%

Nissan
102,390 1.9% 317,441 25.0% 75,901 25.0%

Suzuki
75,475 -22.9% 121,703 -9.3% 18,919 -23.0%

Honda
43,289 -50.6% 125,084 -42.1% 12,561 -60.2%

Mazda
80,114 -2.3% 33,672 1.2% 72,293 3.0%


Mitsubishi
59,069 8.1% 47,198 25.3% 47,096 25.5%

In June, the Japanese car industry was still battling the effects of the tsunami. However, it had global consequences.

Global output June and YTD

Manufacturer June global Change YTD global Change

Toyota
Group
680,968 -7.9% 3,375,692 -22.5%

Nissan
419,831 18.5% 2,114,745 11.1%

Suzuki
197,178 -15.0% 1,360,345 -5.0%

Honda
168,373 -44.5% 1,302,707 -27.7%

Mazda
113,786 -1.3% 548,026 -13.6%


Mitsubishi
106,267 15.1% 585,526 4.4%
Total 1,686,403 -8.2% 9,287,041 -13.1%

Globally, the Japanese auto industry lost 13.1 percent of its output in the first half year of 2011, compared to the same period in 2010. Not all of this goes on account of the disaster, the industry had been in a downdraft before. However, the Japanese majors made 1.4 million fewer cars from January to June 2011 than in the first half of 2010.

Company-wise, Toyota was hardest hit in raw numbers. Being the world’s largest automaker with half of its capacity in Japan, Toyota is the biggest target.

Surprisingly, Honda took the highest percentage hit.  One thought that with only a quarter of its worldwide production in Japan, Honda would have been spared the worst. But this wasn’t the case. When parts and components are missing, overseas plants stand idle.  Toyota also recovers faster. Honda is still 44.5 percent below June 2010

Very surprisingly, Nissan survived more or less unscathed and could raise its half year output by  11.1 percent. Nissan was better diversified, and plain lucky. If its engine plant in Iwaki would be a few miles closer to Fukushima than it already is, Nissan would not look so good.  Now, 2011 could become the defining year for Nissan. Nissan has big plans for emerging markets, especially Asia. Some of its plans will be released tomorrow in Beijing. We’ll be there.

 

Data have been compiled from individual manufacturer releases. Some links require registration.


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Japanese Parts Paralysis: Bad Bets With Chips http://www.thetruthaboutcars.com/2011/07/japanese-parts-paralysis-bad-bets-with-chips/ http://www.thetruthaboutcars.com/2011/07/japanese-parts-paralysis-bad-bets-with-chips/#comments Thu, 21 Jul 2011 15:55:42 +0000 http://www.thetruthaboutcars.com/?p=403784 Why was Honda as much hit as Toyota by the March11 earthquake and tsunami? Doesn’t Honda have the bulk of its production outside of Japan? How could Nissan avoid most of the damage, even with an engine factory close to Fukushima? It was a bit like a roulette game, and it involved a lot of […]

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Why was Honda as much hit as Toyota by the March11 earthquake and tsunami? Doesn’t Honda have the bulk of its production outside of Japan? How could Nissan avoid most of the damage, even with an engine factory close to Fukushima?

It was a bit like a roulette game, and it involved a lot of chips.  According to industry talk in Japan, Nissan had taken a large supply of ECU chips before the quake. Honda and Toyota were waiting for their just-in-time delivery.  Honda and Toyota received most of their engine controller chips from one chipmaker, Renesas. Two weeks after the catastrophe, we had pointed out that Renesas and its damaged fab near the epicenter would turn into a major bottleneck. What’s more, Honda had no idea.

Honda bought its engine computers from three different companies, Keihin, Denso and Hitachi Automotive. Honda thought that it was well diversified. What  Honda did not realize at first was that the chips in the controllers were all from the same company: Renesas.

“Before the quake, automakers were trying to diversify their suppliers,” writes The Nikkei [sub] today. “But the troubles at Renesas revealed that when they looked farther down the supply chain — at indirect suppliers — they had in fact actually been relying on single firms for certain components.”

Honda did not have a problem with its V6 engines, which use chips by U.S.  Freescale Semiconductor. More that 80 percent of Honda’s cars volume is small and midsize cars. They usually use in-line four-cylinder engines, and it turned out than in most of their ECUs were microcontrollers supplied by Renesas.

Starting this fall, Honda will begin to use microcontrollers from other manufacturers for some of its models. What’s more there is a drive under way that seeks to standardize common parts across the Japanese industry, and microcontrollers are the ideal target. The firmware in the controllers can change, but the chips can be supplied from multiple manufacturers.

 

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Toyota U.S.A. Back To 100 Percent In September http://www.thetruthaboutcars.com/2011/06/toyota-u-s-a-back-to-100-percent-in-september/ http://www.thetruthaboutcars.com/2011/06/toyota-u-s-a-back-to-100-percent-in-september/#comments Thu, 16 Jun 2011 19:40:52 +0000 http://www.thetruthaboutcars.com/?p=399096 Yesterday, we reported that the Japanese auto industry is recovering  faster than previously assumed from the effects of the March 11 tsunami. Overseas factories were expected to be affected for several more months while the problems work themselves through the long supply pipeline from Japan.  Much to everybody’s surprise, the situation is improving at a […]

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Yesterday, we reported that the Japanese auto industry is recovering  faster than previously assumed from the effects of the March 11 tsunami. Overseas factories were expected to be affected for several more months while the problems work themselves through the long supply pipeline from Japan.  Much to everybody’s surprise, the situation is improving at a faster clip at transplant factories as well. Toyota said today that North American vehicle production is expected to return to 100 percent in September.

Eight of Toyota’s 12 North American-built models returned to 100 percent production on June 6. The only models where missing parts are slowing down production are the Tacoma, the Tundra, the RAV4, and the Lexus RX 350, explained Toyota U.S.A. spokesperson Tania Saldana. Production of these vehicles will be back at full capacity in September, which puts Toyota’s recovery well ahead of prior estimates.  The attentive observer will note that all 4 are trucks.  Toyota most likely practiced a little triage and helped those cars first that are needed the most.

“After September we will focus on making-up lost production as much as possible,” said Steve St. Angelo, executive vice president of Toyota Motor Engineering & Manufacturing, North America.

The second half of the year, and especially Q4 should become very interesting when Japanese manufacturers come out swinging to make tsunami-induced losses go away. Toyota U.S.A. chief Bob Carter is already in full sales mode: “Our dealers have a healthy supply of cars and trucks available to sell, with more arriving every day, along with competitive lease and APR programs for our customers.”

 

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Japan’s Government Wants Standardized Autoparts http://www.thetruthaboutcars.com/2011/06/japan%e2%80%99s-government-wants-standardized-autoparts/ http://www.thetruthaboutcars.com/2011/06/japan%e2%80%99s-government-wants-standardized-autoparts/#comments Fri, 10 Jun 2011 16:15:39 +0000 http://www.thetruthaboutcars.com/?p=398136 When I stopped working for Volkswagen in 2005, they had some 400,000 parts, or “numbers” as they are called in industry parlance, in their central warehouse in Kassel. With each car, the number climbed higher. On the other hand, some 5 percent were usually out of stock. The launch of each car caused raw nerves […]

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When I stopped working for Volkswagen in 2005, they had some 400,000 parts, or “numbers” as they are called in industry parlance, in their central warehouse in Kassel. With each car, the number climbed higher. On the other hand, some 5 percent were usually out of stock. The launch of each car caused raw nerves in the parts department. When a part was faulty, dealers and production manager were at war for parts. The production managers usually won, and blamed the dealers for shoddy service.

It’s tough enough to keep the hungry beasts at assembly lines and in workshops supplied with parts during peacetime. If a volcano over Iceland blows ash, or if a huge tsunami wipes out a good deal of Japan, it turns into parts paranoia. Now, Japan’s formerly powerful METI, the Ministry of Economy, Trade and Industry, is using the Tohoku disaster to force the Japanese car industry to standardize a lot of the parts it uses.

“Under the lead of the Ministry of Economy, Trade and Industry, manufacturers of automobiles, parts and materials will look into ways to share more components across the various vehicles produced by the automakers,” reports The Nikkei [sub].

One area is chips. Shortages of microcontrollers turned into a big problem after the tsunami. METI is now considering setting up a committee to discuss the standardization of microcontrollers and other semiconductor-related parts.

This is good news and bad news for the auto industry. The good news is that if a disaster strikes, that chip, battery terminal, brake pad, or cylinder head bolt can be bought from another manufacturer. Larger runs of commodity parts would lower their cost and shorten development times.

The bad news is that it could kill a golden goose. Selling replacement parts at huge mark-ups provides major income for automakers and dealers. Large automakers have it down to a science how to make a part slightly different, just to frustrate the efforts of those who deal in replacement parts. A standardized parts bin eventually will be a bonanza for the Boschs, AutoZones or Pep Boys of this world. It would also lower the barrier of entry for new competition.

Therefore, says The Nikkei, “some in the auto industry worry that using more common parts will shift the focus in the autoparts market too much in the direction of price, exposing Japanese autoparts makers to intense competition from low-cost producers in China and elsewhere.”

 

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Japanese Auto Industry: We’re Baaaaack! http://www.thetruthaboutcars.com/2011/06/japanese-auto-industry-were-baaaaack/ http://www.thetruthaboutcars.com/2011/06/japanese-auto-industry-were-baaaaack/#comments Thu, 02 Jun 2011 11:21:55 +0000 http://www.thetruthaboutcars.com/?p=397122   Fresh indications that the Japanese auto industry is getting back on is feet faster than thought. Honda and Toyota were – in numbers of cars not produced – hardest hit by the ripple-effect of the March 11 tsunami. Both originally thought they would not be back to normal before year’s end.  Today, The Nikkei […]

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Fresh indications that the Japanese auto industry is getting back on is feet faster than thought. Honda and Toyota were – in numbers of cars not produced – hardest hit by the ripple-effect of the March 11 tsunami. Both originally thought they would not be back to normal before year’s end.  Today, The Nikkei [sub] writes that Honda “will likely have its domestic production nearly back to normal in July, sooner than expected, as autoparts manufacturers quickly get output back on track.” Yesterday, Toyota had confirmed, that the company will be back to 90 percent in June in Japan. Nissan is also near normal and wants to increase production capacity from September.

Due to the pipeline effect, overseas production was hit later, and will be back to normal later – with a vengeance. Come fall, Honda wants to double its workforce in its Indiana plant. Currently, the plant runs at 50 percent capacity. After 1,000 new workers are hired, the plant will double its capacity to 200,000 units per year. At the annual results press conference in May, Nissan CEO Carlos Ghosn had stunned reporters with the announcement that Nissan wants to make up part of the shortfall later in the year.

The faster pace is driven by suppliers that are coming back to life – sometimes helped by thousands of workers dispatched from their customers, the automakers. Chipmaker Renesas resumed output at its Naka fab yesterday. Germany’s Merck re-started making pearl luster pigments at its Onahama plant. Toho Zinc expects to ship corrosion-fighting zinc from its Onahama plant by June 10.

 

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Quote Of The Day: Japan’s Downgrade Raises All Ships http://www.thetruthaboutcars.com/2011/05/quote-of-the-day-japan%e2%80%99s-downgrade-raises-all-ships/ http://www.thetruthaboutcars.com/2011/05/quote-of-the-day-japan%e2%80%99s-downgrade-raises-all-ships/#comments Tue, 31 May 2011 07:19:50 +0000 http://www.thetruthaboutcars.com/?p=396788 Amazing quote in today’s Nikkei [sub]: “Shares in Toyota Motor Corp. gained further ground Tuesday afternoon, after Moody’s Investors Service Inc. said during the lunch break it may downgrade Japan’s sovereign debt ratings.” Welcome to the wicked world of global economics. The market is betting that the downgrade will make the yen cheaper (it did, […]

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Amazing quote in today’s Nikkei [sub]:

“Shares in Toyota Motor Corp. gained further ground Tuesday afternoon, after Moody’s Investors Service Inc. said during the lunch break it may downgrade Japan’s sovereign debt ratings.”

Welcome to the wicked world of global economics. The market is betting that the downgrade will make the yen cheaper (it did, you dollar buys a whole extra yen today), which in turn will give hard hit Japanese car exporters a little reprieve. They need it.

Now, U.S. auto industry, don’t get any ideas …

 

 

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Japanese Car Exports Down 67.8 Percent In April http://www.thetruthaboutcars.com/2011/05/japanese-car-exports-down-67-8-percent-in-april/ http://www.thetruthaboutcars.com/2011/05/japanese-car-exports-down-67-8-percent-in-april/#comments Tue, 31 May 2011 06:55:11 +0000 http://www.thetruthaboutcars.com/?p=396784 Hit by the March 11 earthquake and tsunami, exports of Japanese motor vehicles plummeted 67.8 percent from a year earlier in April.This according to data released today by the Japan Automobile Manufacturers Association. The quake hit all companies, although not equally hard … Japanese Motor Vehicle Exports April 2011 Apr-10 Apr-11 Diff TOYOTA 150,118 31,025 […]

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Hit by the March 11 earthquake and tsunami, exports of Japanese motor vehicles plummeted 67.8 percent from a year earlier in April.This according to data released today by the Japan Automobile Manufacturers Association. The quake hit all companies, although not equally hard …

Japanese Motor Vehicle Exports April 2011

Apr-10 Apr-11 Diff
TOYOTA 150,118 31,025 -79.3%
NISSAN 52,265 14,642 -72.0%
MAZDA 54,387 20,606 -62.1%
MITSUBISHI 27,878 19,491 -30.1%
ISUZU 11,939 2,770 -76.8%
DAIHATSU 3,594 984 -72.6%
HONDA 27,216 6,473 -76.2%
SUBARU 29,682 8,182 -72.4%
UD TRUCKS 1,472 692 -53.0%
HINO 5,614 3,069 -45.3%
SUZUKI 24,444 17,121 -30.0%
MITSUBISHI FUSO 2,931 1,006 -65.7%
TOTAL 391,540 126,061 -67.8%

In absolute numbers, export-heavy Toyota was hardest hit with a loss of 119,093 vehicles over April 2010. Nissan is a distant, but nonetheless surprising second with a loss of 37,623 units. All in all, the tsunami did cost the Japanese car industry 265,479 cars not exported, compared to April 2010. In dollar terms, the Japanese industry exported $5.9 billion in cars and parts in April, down $5.7 billion or 49 percent. Globally, the Japanese auto industry lost more than 600,000 cars in April.

 

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Japan Plans Parts Maker Bailout – Of Sorts http://www.thetruthaboutcars.com/2011/05/japan-plans-parts-maker-bailout-%e2%80%93-of-sorts/ http://www.thetruthaboutcars.com/2011/05/japan-plans-parts-maker-bailout-%e2%80%93-of-sorts/#comments Mon, 30 May 2011 18:50:27 +0000 http://www.thetruthaboutcars.com/?p=396681 The Development Bank of Japan is planning a bailout found for Japan’s hard-hit auto parts industry. The parts industry took the brunt of the March 11 earthquake and tsunami, and it is parts shortages that hold up a speedy recovery of Japan’s largest industry sector. According to the Yomiuri Shimbun, the DBJ plans to raise […]

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The Development Bank of Japan is planning a bailout found for Japan’s hard-hit auto parts industry. The parts industry took the brunt of the March 11 earthquake and tsunami, and it is parts shortages that hold up a speedy recovery of Japan’s largest industry sector. According to the Yomiuri Shimbun, the DBJ plans to raise 50 billion yen for the fund.

The bank will ask major financial groups and the Japan Auto Parts Industries Association to invest in the fund. With the assistance of the association, the DBJ will select beneficiaries of the fund.

Money will go to major auto parts manufacturers,  with the expectations that these makers then invest in subcontractors.

According to the Yomiuri, there are about 800 major (Tier 1) auto parts manufacturers. They purchase smaller parts from about 4,000 (Tier 2) companies that are below them, which do business with about 20,000 companies below them (Tier 3 and lower).

That would make a total of roundabout 25,000 companies. 50 billion yen convert to $617 million. Evenly distributed, the fund would come to roundabout $25,000 per company. By the sounds of it, it won’t be evenly distributed. It’s a bailout with a teaspoon.

(Part 2 of the video is here. Part 3 is here. Part 4 here.)

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Nikkei: Toyota Back To 90 Percent Next Month, At 100 Percent In August http://www.thetruthaboutcars.com/2011/05/nikkei-toyota-back-to-90-percent-next-month-at-100-percent-in-august/ http://www.thetruthaboutcars.com/2011/05/nikkei-toyota-back-to-90-percent-next-month-at-100-percent-in-august/#comments Wed, 25 May 2011 15:24:15 +0000 http://www.thetruthaboutcars.com/?p=396052 Come June, Toyota “plans to bring domestic auto production back to as much as 90 percent of targets set before the March earthquake hit, thanks to faster-than-expected improvements in parts supplies,” The Nikkei [sub] writes today. At the annual results conference in Tokyo, Akio Toyoda had said Toyota Toyoda would be on its way back […]

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Come June, Toyota “plans to bring domestic auto production back to as much as 90 percent of targets set before the March earthquake hit, thanks to faster-than-expected improvements in parts supplies,” The Nikkei [sub] writes today. At the annual results conference in Tokyo, Akio Toyoda had said Toyota Toyoda would be on its way back to normal beginning in June, with hopefully 70 percent of production reinstated in summer. This was already a two month improvement over previous plans. Two weeks later, the outlook seems to be even better. If The Nikkei heard correctly.

The report is not based on an official announcement, and The Nikkei does not cite sources. The wire service says the faster recovery is due to “securing some vital parts thanks to alternate production.”

According to The Nikkei, Toyota now hopes to normalize production much earlier than its previous November/December forecast. The Nikkei thinks that by August, Toyota could be producing 13,000 units a day in its 17 plants in Japan. If  the report is true, then Japan’s car industry as a whole could be back on its feet faster than thought.

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Japanese Parts Paralysis: Toyota Europe Up, Honda Brazil Down http://www.thetruthaboutcars.com/2011/05/japanese-parts-paralysis-toyota-europe-up-honda-brazil-down/ http://www.thetruthaboutcars.com/2011/05/japanese-parts-paralysis-toyota-europe-up-honda-brazil-down/#comments Thu, 19 May 2011 11:55:38 +0000 http://www.thetruthaboutcars.com/?p=395470 The ripple effects of the March 11 tsunami keep bouncing around the globe. The is good news and bad news. (Or bad news and good news, depending on the side you are on.) Toyota said it will bring all its assembly lines in Europe back to full production by the end of June, The Nikkei […]

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The ripple effects of the March 11 tsunami keep bouncing around the globe. The is good news and bad news. (Or bad news and good news, depending on the side you are on.)

Toyota said it will bring all its assembly lines in Europe back to full production by the end of June, The Nikkei [sub]. Five of its nine European plants have been forced to reduce output. Last year, Toyota assembled some 460,000 vehicles in Europe, and by the end of May, European production was cut by some 40,000 vehicles, says The Nikkei.

Meanwhile in Brazil, Honda has to halve production in Sumare, Sao Paulo, beginning next month because of a shortage of parts. According to the Dow Jones Newswire, Honda will cut production from 600 to 300 units per day. Honda is short of unspecified “electronic components.”

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Japanese Parts Paralysis Likely To Cause Steep Losses http://www.thetruthaboutcars.com/2011/05/japanese-parts-paralysis-likely-to-cause-steep-losses/ http://www.thetruthaboutcars.com/2011/05/japanese-parts-paralysis-likely-to-cause-steep-losses/#comments Tue, 03 May 2011 17:31:36 +0000 http://www.thetruthaboutcars.com/?p=393538   Japan’s carmakers are slowly returning back to normal, hobbled only by unsure supply of parts and sometimes power. It will be slow going and full of surprises. One thing is for sure: The March 11 tsunami will have an ugly effect on carmakers’ books. Combined losses for the Japan’s carmakers and suppliers could “the […]

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Japan’s carmakers are slowly returning back to normal, hobbled only by unsure supply of parts and sometimes power. It will be slow going and full of surprises. One thing is for sure: The March 11 tsunami will have an ugly effect on carmakers’ books. Combined losses for the Japan’s carmakers and suppliers could “the biggest ever,” surpassing those during 2008 to 2009 financial crisis, Noriyuki Matsushima, an analyst in Tokyo at Citigroup Inc., told Bloomberg.

  • Toyota has the highest market share in Japan, the most production capacity, and the highest exposure. Toyota could post net losses of 155 billion yen ($1.9 billion) in the three months ending June 30, and 241 billion yen for the six months ending Sept. 30, according to the average of analysts’ estimates compiled by Bloomberg.
  • Nissan’s six-month net loss is forecasted much lower at 48 billion yen ($593 million).
  • For Honda, the analysts forecast a 37.4 billion yen ($462 million) profit for the six months ending Sept. 30.

Citigroup’s Matsushima said output reductions by Japanese carmakers may continue until April 2012: “Japan’s automakers will run out of inventory at overseas plants in the second quarter, so figures for that quarter may be lower than those in the first quarter, even as they begin to raise production levels.”

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Japanese Parts Paralysis: Worst Situation Since The War http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-worst-situation-since-the-war/ http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-worst-situation-since-the-war/#comments Wed, 27 Apr 2011 14:13:02 +0000 http://www.thetruthaboutcars.com/?p=393039 “This is the worst situation we’ve faced since the war,” a source close to Toyota told the Yomiuri Shimbun. The Japanese car industry is facing post-war-like shortages when it comes to auto parts. Toyota is short 150 parts positions, which can be anything from a bolt to a complete dashboard. Dealerships are empty – of […]

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“This is the worst situation we’ve faced since the war,” a source close to Toyota told the Yomiuri Shimbun. The Japanese car industry is facing post-war-like shortages when it comes to auto parts. Toyota is short 150 parts positions, which can be anything from a bolt to a complete dashboard.

Dealerships are empty – of cars. Test drive cars do double duty as display vehicles. “We get a lot of customers coming in, but we don’t have cars to sell them,” a salesperson told the Tokyo paper.

Major Japanese carmakers have restarted production at the beginning of last week, but plants are only operating at about 50 percent of their normal output. Toyota does not expect to be back to normal before the end of the year.

Japanese automakers have reported a 57.5 percent reduction in production for March – a month that had only its second half affected by the March 11 earthquake and tsunami. April numbers are expected to be worse. What’s more, overseas production is just beginning to be affected. “

In the meantime, Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association, said what many refuse to accept: Japanese automakers simply don’t know what the near future will bring.

“Generally speaking, car makers are in a situation where they can’t fix their production volumes, even though this is an importantelement of their business,” Shiga, who is also COO at Nissan, told The Nikkei [sub]. “We hope (investors) will understand.”

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Japanese Parts Paralysis: Nissan’s Iwaki Engine Plant Back On-line http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-nissan%e2%80%99s-iwaki-engine-plant-back-on-line/ http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-nissan%e2%80%99s-iwaki-engine-plant-back-on-line/#comments Thu, 21 Apr 2011 10:00:19 +0000 http://www.thetruthaboutcars.com/?p=392284 Nissan’s Iwaki engine plant is back on line, as this video from Nissan’s in-house channel attests. The plant, located some 35 miles away from the stricken Fukushima power plant, was severely damaged by the quake and had been off-line ever since March 11. In the face of rumors that the plant would be abandoned, Nissan […]

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Nissan’s Iwaki engine plant is back on line, as this video from Nissan’s in-house channel attests. The plant, located some 35 miles away from the stricken Fukushima power plant, was severely damaged by the quake and had been off-line ever since March 11.

In the face of rumors that the plant would be abandoned, Nissan CEO Carlos Ghosn had toured Iwaki end of March and “vowed to use every possible means to rebuild it,”  The Nikkei [sub] reported. Yesterday, Nissan made good on that promise.

Iwaki itself is the largest manufacturing city in the Tohoku region, and the Nissan plant is one of its corner stones. In an internal staff meeting on April 1, Ghosn had said: “By restoring Nissan, we can restore the community, and by restoring the community, we will help to restore Nissan.”

The Iwaki plant is one of two Nissan engine plants in Japan. It makes about 376,000 engines annually. It is strategically important for Nissan’s V-6 engines. Full production will resume in June.

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Japanese Parts Paralysis: Toyota Announces More Shutdowns In North America And China http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-toyota-announces-more-shutdowns-in-north-america-and-china/ http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-toyota-announces-more-shutdowns-in-north-america-and-china/#comments Wed, 20 Apr 2011 23:12:57 +0000 http://www.thetruthaboutcars.com/?p=392278   During an intimate round table in Shanghai, usually well informed reporters were harping on the influence of radiation on Toyota sales. I expected the heads of communication of Toyota worldwide and Toyota China to blurt out: “Radiation? What impacts sales is the fact that we don’t have any cars to sell.” But they kept […]

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During an intimate round table in Shanghai, usually well informed reporters were harping on the influence of radiation on Toyota sales. I expected the heads of communication of Toyota worldwide and Toyota China to blurt out: “Radiation? What impacts sales is the fact that we don’t have any cars to sell.” But they kept their cool in the face of a hot topic.

After a month-long quake-induced hiatus, Toyota restarted production in all Japanese factories on Monday. In the meantime, the shockwaves of the tsunami ripple through the supply lines.

Vehicle production in China will be carried out at 30 percent to 50 percent of normal from April 21 through June 3 due to parts supply difficulties, Toyota said in a statement. “A decision on production after June 3 will depend on the parts-supply situation,” says the message quite ominously.

Production at Toyota’s North American plants will be suspended on Mondays and Fridays between April 26 and June 3. Production from Tuesdays through Thursdays will be carried out at approximately 50% of normal. In Canada, production will be suspended for the week starting May 23, and in the United States, for the week starting May 30.

Ominous message: “No decisions have yet been made regarding production after June 3.”

There is no need to play up radiation hysteria. Toyota is suffering from more serious fall-out. Sales of Toyota are impacted by the fact that disruptions of the parts supply prevent cars from being made.

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Japanese Parts Paralysis: Honda Extends Half Steam Production Into May http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-honda-extends-half-steam-production-into-may/ http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-honda-extends-half-steam-production-into-may/#comments Sat, 16 Apr 2011 19:03:36 +0000 http://www.thetruthaboutcars.com/?p=391529 Honda sources the vast majority of parts and materials needed for North American production in North America. “However, for global efficiency, a few critical parts continue to be supplied from Japan,” says Honda in a statement. Honda restarted production of component parts for North American plants Monday, April 4 at several Honda plants in Japan. […]

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Honda sources the vast majority of parts and materials needed for North American production in North America. “However, for global efficiency, a few critical parts continue to be supplied from Japan,” says Honda in a statement. Honda restarted production of component parts for North American plants Monday, April 4 at several Honda plants in Japan. However, those need their own parts and supplies. Therefore, Honda’s component production in Japan continues to run at approximately 50 percent of the original production plan.

This of course impacts North American production. Honda announced that North American plants will continue to run at half steam through May 6 2011. Production levels at these plants had been throttled down on March 30, and this is how it will stay for a while.

The following Honda cars are being built in North America:

Marysville, Ohio: Honda Accord, Honda Accord Coupe, Acura TL, Acura RDX
East Liberty, Ohio: Honda CR-V, Honda Element, Honda Accord Crosstour
Greensburg, Ind.: Honda Civic Sedan, Honda Civic GX natural gas
Lincoln, Alabama: Honda Odyssey, Honda Pilot, Honda Ridgeline
Alliston, Ontario: Honda Civic (Sedan, Coupe, Si) Acura MDX, Acura ZDX, Acura CSX (The CSX is sold only in Canada)
El Salto, Mexico: Honda CR-V

The following Honda cars are built in Japan for the North American market

Honda Fit, Insight, CR-Z, Civic Hybrid, Acura TSX and Acura RL.

Honda produces a small percentage of CR-Vs in Japan for the U.S. as well.

 

 

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Japanese Parts Paralysis: Toyota Japan Production On Half Rations Into The Summer http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-toyota-japan-production-on-half-rations-into-the-summer/ http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-toyota-japan-production-on-half-rations-into-the-summer/#comments Fri, 15 Apr 2011 11:03:44 +0000 http://www.thetruthaboutcars.com/?p=391384 The March 11 tsunami is having long term effects on Japanese car production. Toyota, the world’s and by far Japan’s largest car company, is severely impacted. Toyota just announced that vehicle production from May 10 to June 3 will proceed at approximately 50 percent of normal. Basically, Toyota will open all its Japanese vehicle-production plants […]

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The March 11 tsunami is having long term effects on Japanese car production. Toyota, the world’s and by far Japan’s largest car company, is severely impacted. Toyota just announced that vehicle production from May 10 to June 3 will proceed at approximately 50 percent of normal.

Basically, Toyota will open all its Japanese vehicle-production plants on Monday, April 18, and will run them on half steam until April 27. Then, Toyota will take the annual spring holiday a day earlier and close on April 28th. Toyota will extend the holiday for another full day and will start working on May 10. One day of these extended holidays was planned, the other was not. Production will then continue at 50 percent capacity through June 3. Which does not mean that all will return to normal in June.

“TMC will decide on production after this period after assessing the situation of its suppliers and other related companies,” the statement says. The “other related companies” do not directly refer to Japan’s teetering power companies, as one may think. “Most of Toyota Motor Corporation’s Japanese production capacity is located outside of the areas serviced by the Tokyo and Tohoku Electric Power companies,” says Toyota spokesman Paul Nolasco. He says the “other companies” could be shipping companies, Tier 2 and 3 suppliers etc.

The power shortage however will impede many of these other companies for months to come. The Nikkei [sub] writes that Japanese “utilities are delaying the restart of nuclear reactors that have been shut down for regular maintenance and inspection, amid rising safety fears among residents.” According to the report, “sixteen reactors have been halted for maintenance, of which eight have postponed their restarts.”

Once June comes around, Toyota will have had lost approximately half of its Japanese production in March, about two thirds in April, and half in May. Overseas shipments of cars and parts needed for overseas production will continue to suffer well into the summer.

 

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Japanese Parts Paralysis Reaches Subaru Indiana http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-reaches-subaru-indiana/ http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-reaches-subaru-indiana/#comments Wed, 13 Apr 2011 17:19:47 +0000 http://www.thetruthaboutcars.com/?p=391178 Production of Legacy, Outback and Tribeca Subarus in Lafayette, Ind. will pause on Friday, April 15, Monday, April 18 and Monday, April 25 while Subaru sorts out supplies from Japan, Subaru of Indiana spokeswoman spokeswoman Jennifer McGarvey told Automotive News [sub]. Production at the plant had been impeded before. Yesterday, Fox59 reported that production of […]

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Production of Legacy, Outback and Tribeca Subarus in Lafayette, Ind. will pause on Friday, April 15, Monday, April 18 and Monday, April 25 while Subaru sorts out supplies from Japan, Subaru of Indiana spokeswoman spokeswoman Jennifer McGarvey told Automotive News [sub].

Production at the plant had been impeded before.

Yesterday, Fox59 reported that production of the Toyota Camry, which runs on a separate line in Lafayette, would be stopped on April 21 and 25. Reuters clears the confusion and says that “a separate production line that makes the Camry for Toyota Motor Corp will also shut down for four days in April after a reduced production schedule through April 25.” Toyota had announced North American plant closures for April 15, 18, 21, 22, and 25.

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Japanese Parts Paralysis: Toyota N.A. Shutting Down For A Week http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-toyota-n-a-shutting-down-for-a-week/ http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-toyota-n-a-shutting-down-for-a-week/#comments Fri, 08 Apr 2011 19:45:49 +0000 http://www.thetruthaboutcars.com/?p=390519 Better get used to this: Barely had Toyota announced that it will reopen its Japanese plants, then Toyota U.S.A. chimes in and says: “We are shutting down.” Welcome to the supply chain gang. Toyota is running its N.A. vehicle plants on what they call “a reduced schedule.” Meaning: Production will be suspended on April 15, […]

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Better get used to this: Barely had Toyota announced that it will reopen its Japanese plants, then Toyota U.S.A. chimes in and says: “We are shutting down.” Welcome to the supply chain gang. Toyota is running its N.A. vehicle plants on what they call “a reduced schedule.”

Meaning:

  • Production will be suspended on April 15, 18, 21, 22, and 25.
  • The Georgetown, Ky plant will build vehicles on April 21
  • Most of the company’s North American engine and component plants will follow the same schedule.
  • Future production plans will be determined at a later date.

There will be no layoffs. Employees may report to work for training and plant improvement activities, use vacation, or take unpaid time off.

The reason for the reduced schedule are the well-known parts problems. Toyota’s N.A. production is to 85 percent local (NAFTA) content. The devil lurks in the remaining 15 percent. Until recently, Toyota Japan was short 500 parts positions. Now the shortlist is down to 150. As trite as it sounds by now, a single missing part …

Toyota spokesman Mike Goss told Reuters that for the period from March 11 to April 25, Toyota is looking at a shortfall of 35,000 units. In Japan, the number stands at 260,000 for the period from March 14 through April 8.

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Japanese Parts Paralysis: Lack Of Chips For Cars Can Cost $76 Billion http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-when-the-chips-are-down/ http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-when-the-chips-are-down/#comments Fri, 08 Apr 2011 15:59:53 +0000 http://www.thetruthaboutcars.com/?p=390488 When we worked on the Phaeton launch in 2001, we said it had “more computers than a small company.” It had 56. Today’s cars have anywhere between 30 and 100 computers on board. They are small microcontrollers that typically chat with each other via a CAN bus. You don’t take just any microcontroller for the […]

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When we worked on the Phaeton launch in 2001, we said it had “more computers than a small company.” It had 56. Today’s cars have anywhere between 30 and 100 computers on board. They are small microcontrollers that typically chat with each other via a CAN bus. You don’t take just any microcontroller for the job. They need to hold up to the harsh environment inside of a car. Their makers need to hold up to the harsh environment presented by the purchasing departments of automakers that squeeze them for every penny. As a result of both, there are only a few players in this field. This is the story of one of them.

The largest manufacturer of automotive microcontrollers is Renesas, followed by Infineon, STM, Freescale and Bosch.

Renesas controls about 41 percent of the global market for automotive microcontrollers, says Automotive News [sub]. EE Times gives them only 11 percent. But all agree, Renesas is the largest in the automotive field. The world’s largest automaker, Toyota, is said to be the largest customer of Renesas.

Renesas, which had merged with NEC Electronics, has 90 percent of its global capacity in Japan.

If you want to relive how the chip giant was battling with the damage caused by the earthquake and tsunami, how they coped and cope with the power outages, then you find the blow-by-blow here.

From the first notice on March 14, the Monday after the quake (7 out of 22 factories down, 8 impacted by power outage) to the last one from just two days ago. In this notice, you see that Renesas is slowly getting back to normal, except for one fab: The Naka fab, in Hitachinaka-shi, Ibaraki Prefecture . This plant is listed as “Temporarily shutting production.“ The plant is down for the duration, tentative target date for re-opening: July 2011. Or thereabouts.

The trouble is, fate wanted it that “Renesas’ Naka plant in northeastern Japan accounts for about 25 percent of its global automotive microcontroller capacity,” says Automotive News. If the world’s largest supplier of automotive microcontrollers loses a quarter of its capacity, someone will get hurt.

According to AN, Renesas will most likely shift production from Naka to other Renesas fabs in Japan or Singapore. And now digest this quote from the report:

“But that transfer will account for less than half of Naka’s output, and it could be another two months before production starts up at those sites.

The manufacturing process for microcontrollers, or MCUs, can take up to two months, meaning that it could be another four months before those new sites are sending finished products to customers.”

Renesas thinks it can fill “approximately 70 percent of the customer orders currently in place with the Naka factory that are requested to be delivered by the end of May, from the finished goods already in stock and work-in-process goods in the assembly lines.”

After that, Renesas President Yasushi Akao is hoping for the “kind understanding and support” from his customers.

This little spotlight shows that things are not as clear cut as they appear. Nothing happens for a while. The first impact from Naka will be felt in June, when 30 percent of the orders remain unfilled. The second impact will hit when the deliveries are used up, and new chips won’t be flowing until September. These are no chips you can order from the Digikey catalog. These are specialized chips for special applications. Sourcing them from another manufacturer would take even longer.

Last night’s  7.1 magnitude aftershock left four Renesas fabs in northern Japan without power, says Reuters. It is unclear when production will be restarted.

And this is just one out of many suppliers.

 

Update: The Japanese government just chimed in (via The Nikkei [sub]: If production of the “key automobile component”, (namely the microcontrollers)  “does not resume for the six-week period through the end of April, it could result in a loss of around 6.5 trillion yen for auto manufacturing worldwide, according to the government estimate.”  According to my calculator, that is $ 76.4 billion.  The reader of the above knows by now: At least 25 percent of the supply will be missing for a while.

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Japanese Parts Paralysis: Tsunami Reaches U.S. Workshops http://www.thetruthaboutcars.com/2011/03/japanese-parts-paralysis-tsunami-reaches-u-s-workshops/ http://www.thetruthaboutcars.com/2011/03/japanese-parts-paralysis-tsunami-reaches-u-s-workshops/#comments Wed, 30 Mar 2011 08:55:02 +0000 http://www.thetruthaboutcars.com/?p=389067 The first waves of the Japanese tsunami are reaching consumers at American shores. Oddly, some of the cars first affected may be the ones customers already have, not the ones they cannot buy. Toyota notified its dealers across the United States to prepare for a shortage of replacement parts, due to disruptions caused by the […]

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The first waves of the Japanese tsunami are reaching consumers at American shores. Oddly, some of the cars first affected may be the ones customers already have, not the ones they cannot buy. Toyota notified its dealers across the United States to prepare for a shortage of replacement parts, due to disruptions caused by the monster earthquake and tsunami in Japan, The Nikkei [sub] writes today.

Out of 300,000 “numbers”, as they call parts items in the vernacular, 233 are in short supply and have been “placed on controlled allocation,” as a Toyota U.S.A. statement says. Dealers are being asked to “refrain from placing any orders in excess of what is critically needed to support customer emergency need and true customer demand.”

The typical car dealer emulates the factory: He orders just in time. When a part is needed, the part is ordered. Parts inventories at dealers are for all intents and purposes a thing of the past.

What items are short is a closely guarded secret.

The Nikkei writes it could be “steeling wheel covers” (not a racist slur, they really wrote that), suspension parts and air bags.

Automotive News [sub] says “the initial list of short-supply spare parts mostly involves body panel and pillar subassemblies and shock absorbers.”

The Wall Street Journal heard that “parts affected include shock absorbers, radiator supports, fender components, tail gate hinges and oil seals.”

There is something for everyone. All publications concur on one message: Toyota told its dealers that “both the number of parts affected, and the length of interruption may increase.”

Where I came from, the folks at Volkswagen’s parts HQ in Kassel were pounding their chests if they had a fill rate better than 98 percent. 233 out of 300,000 is a (mathematical) fill rate of 99.92 percent, usually cause for self-congratulatory memos to upper management, not for warnings to dealers. It’s a good guess that these are only the first ripples of a big wave of parts outages.

At Toyota HQ in Japan, they have no comment on the situation on U.S. parts shelves, but the reiterate again that they currently have problems with about 500 items. In the complicated algebra of parts supply, 500 items missing in current production have a much greater impact than 233 replacement parts spread over generations of older cars. Can’t make a car by calling NAPA.

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Japanese Parts Paralysis: 35 Miles From The Fukushima Reactor, Nissan Wants To Save Its Plant http://www.thetruthaboutcars.com/2011/03/japanese-parts-paralysis-35-miles-from-the-fukushima-reactor-nissan-wants-to-save-its-plant/ http://www.thetruthaboutcars.com/2011/03/japanese-parts-paralysis-35-miles-from-the-fukushima-reactor-nissan-wants-to-save-its-plant/#comments Tue, 29 Mar 2011 10:42:46 +0000 http://www.thetruthaboutcars.com/?p=388925 In the face of hysteria about radiation that drowns out the true death and destruction in Japan, Renault and Nissan CEO Carlos Ghosn toured the earthquake-damaged Nissan engine plant in Iwaki. Iwaki is some 35 miles from the stricken Fukushima power plant. Right away, Carlos Ghosn had to deny rumors that Nissan would abandon their […]

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In the face of hysteria about radiation that drowns out the true death and destruction in Japan, Renault and Nissan CEO Carlos Ghosn toured the earthquake-damaged Nissan engine plant in Iwaki. Iwaki is some 35 miles from the stricken Fukushima power plant. Right away, Carlos Ghosn had to deny rumors that Nissan would abandon their engine plant. Instead, Ghosn “vowed to use every possible means to rebuild it,” says The Nikkei [sub].

It will be slow going. Ghosn said the plant will “restart some operations” in mid-April. Full scale operation is expected for early June, with “expected” being the operative word.

Ghosn gave about 300 employees and staffers from suppliers a pep talk. They should turn the crisis into an opportunity, Ghosn said, and now is the time when Nissan should show its spirit.

Good spirits are needed. More than 70,000 people in the neighborhood have been evacuated from a 12 mile exclusion zone around the power plant. 130,000 people who live in a 6 mile band beyond have been advised to leave, or, at least to stay indoors. Supplies are running short as trucking firms refuse to make deliveries to the zone. According to Reuters, the Japanese “government has not extended the mandatory evacuation zone but is coming under mounting criticism for not doing so. Experts say an extension may be inevitable.”

The engine plant is not all that is holding Nissan back. Later in the day, Nissan told Reuters that a return to full production in Japan will take “some time.  Nissan hopes to manufacture on a “normal process” basis from mid-April. However, Nissan spokesfolk told Reuters that deliveries of some parts may take longer to return to normal.

In the meantime, the disaster claimed another life. A 64-year-old Fukushima farmer hanged himself last week after saying “our vegetables are no good anymore.”

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