Bailout Watch 510: Toyota Stockpiling Parts for GM C11

by Robert Farago

Published: April 27th, 2009

bailout watch 510 toyota stockpiling parts for gm c11

Well, they would, wouldn’t they? Makes sense. Why be caught flat-footed when the inevitable occurs? What makes less sense is that this story, hailing from our good friends over at Automotive News [AN, sub], doesn’t mention Chrysler or GM until the eighth paragraph, and then only in passing. And not before the scribes take a swipe at the Japanese automaker for abandoning The Toyota Way: “The moves violate Toyota’s vaunted ‘just in time’ production philosophy,” AN writes. “which views warehousing as a symbol of muda, or waste and inefficiency.” But hey it’s muda out there!

More than half of Toyota’s 500 U.S. parts suppliers also do business with General Motors, [senior vice president of Toyota Motor Engineering & Manufacturing North America Inc. and president of the company’s large assembly complex in Georgetown, Ky. Steve] St. Angelo said. And some of them are struggling.

On March 11, Jim Lentz, president of Toyota Motor Sales U.S.A., said Toyota has “real concerns” about 20 to 30 of its U.S. suppliers for fear that they could shut down Toyota production.

In fact, Toyota’s been proactively preparing for a Chrysler/GM meltdown since January. At least.

To monitor these suppliers, Toyota established a “war room” three months ago at its North American headquarters in Erlanger, Ky. Every Thursday morning, senior executives hold a one-hour meeting to monitor Toyota’s suppliers.

Names of suppliers deemed to be in good shape for the week are marked with a circle. Suppliers marked with a triangle have experienced some trouble but are thought to be performing adequately, St. Angelo said.

Suppliers in immediate trouble are marked with an “X.”

St. Angelo also said that Toyota has dispatched people to help troubled suppliers improve their financial picture by cutting costs and improving performance.

What’s the bet Chrysler and GM haven’t prepared this well for their own bankruptcy? Which is why Toyota’s doing it for them. Bailout nation or no, Darwin will not be denied.

Robert Farago

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2 of 7 comments

Jwolfe on Apr 27, 2009

Sounds like an excellent system to me. Sounds like a good time to get into the parts business on the cheap here in a few months, if one was interested.

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CPTG on May 07, 2009

To me, the most scary thing about Toyota stockpiling American Car parts---drum roll...is that they are even USING American Car Parts!!! Eeeeuuuuu!!!

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