The Truth About Cars » supply chain The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 16 Jul 2014 16:33:07 +0000 en-US hourly 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 (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 » supply chain Australian Supplier Association Warns Of 33,000 Jobs Lost In Wake Of Producer Exits Thu, 13 Feb 2014 16:00:29 +0000 2010-2011_Holden_VE_II_Ute_(MY11)_SV6_utility_(2011-04-22)_03

In light of Toyota Australia’s decision to cease all manufacturing operations in Australia by 2017, the Federation of Automotive Products Manufacturers is warning that as many as 33,000 jobs in the supply chain are at risk of following the automakers out of the country.

Just-Auto reports that the lost jobs include those in design, engineering, prototyping, R&D and assembly. FAPM said it was satisfied with the reasons behind Toyota Australia’s production exit, though president Jim Griffin warned of rough seas ahead:

“We may now not have time enough to transition. Our industry has the skills and know-how to be competitive but we need time and assistance to re-shape our businesses, to get new customers and diversify into new markets.”

FAPM chief executive also added that diversification, exporting and/or importing new business models outside of the dying local automotive industry may be the only way through the storm, even if most of their membership won’t make it out alive when the last Aurion and Commodore leave the assembly line in three years’ time.

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Supply Chain Bottleneck Due In Five Years According to Study Wed, 13 Nov 2013 14:22:09 +0000

Bottlenecks are bad things to experience. Around 70,000 years ago, the Toba supervolcano eruption reduced humanity to anywhere from 1,000 to 10,000 breeding pairs — thus creating a genetic bottleneck — alongside a global cooling event concurrent with the Last Glacial Period.

For automakers in the United States and their North American supply chain, their Toba event is coming.

A study from Detroit consulting firm Harbour Results, Inc. warns that in five years’ time, the North American auto industry will experience a 40 percent bottleneck in their ability to screw together the cars and trucks we so love, due to falling short $6 billion in tooling capacity. As it stands, the industry will need $15.2 billion in tooling each year to avoid this fate; current industry capacity is $9.3 billion.

The issue isn’t helped by the fact that there are only 750 tool shops in North America, down a third from their peak in the late 1990s in part due to the global recession. On top of this, the average age of a toolmaker in each of the shops hovers around 52, with few new toolmakers coming up in the ranks to replace them; Harbour Results’ CEO Laurie Harbour states the training needed to bring aboard a toolmaker takes six years to complete.

On the other side, the automakers are planning to introduce 154 new models between now and 2018, a third alone coming down the ramps in 2014. With each new model requiring around 3,000 new tools to screw them all together, if not more due to increasing complexity, capacity can only continue to be strained.

Along with the other issues at hand, there’s also the fact that the automakers producing their goods in North America prefer to keep their business inside the NAFTA zone, ignoring Chinese toolmakers who could make the tooling needed quickly and cheaply. That said, Chinese and German toolmakers are planning to set up shop in the economic zone soon in an effort to encourage automakers to reach out for their tools once the latter opts to remove their blinders.

Another potential cause of the coming automotive production bottleneck? Disasters such as the Marl Chemical Park explosion in 2012, the Fukushima earthquake and tsunami in 2011, or a similar incident like the Lac-M├ęgantic derailment this year.

The only solution to all of these scenarios, in the words of Charlie Sheen, is for automakers to plan better by finding where the bottlenecks could occur, and promptly finding ways to avoid them, whether it’s through shifting key component manufacturing elsewhere or simplification of their latest and greatest.

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