By on March 19, 2011

It is one of those strange twists of fate that Toyota’s arch-nemesis, GM, would be one of the first overseas automakers to experience shutdowns caused by a lack of supplies from tsunami-devastated Japan.

Yesterday, nearly 60 workers were laid off at GM’s Tonawanda Engine facility, the Niagara Gazette reports. Is Tonawanda waiting for parts from Japan?

No, they are waiting for GM’s Shreveport Assembly plant in Louisiana to reopen. That plant will be shut down the week of March 21 due to a parts shortage caused the crisis in Japan.
Tonawanda makes engines for the Chevy Colorado, which is assembled in Shreveport.

Meanwhile in Europe, GM’s German incarnation Opel will stop the lines at its plant in Eisenach for two shifts on Monday and Tuesday due to a missing electronic part, sourced from a Japanese supplier, Automobilwoche [sub] says.

That after Opel had announced that it will stop the lines at its plant Zaragoza, Spain, for 24 hours this coming Monday, and again on Friday. Both plants make the Opel Corsa.

What we see here are just the first precursors of much bigger problems. High value electronic parts are air freighted. Those you’ll miss the day after. Cars, CKD kits, engines, transmissions and anything from Akebono brake pads to Denso spark plugs come by boat. There are several weeks of supply on the water. The real problems will begin in early April at the West Coast and a few weeks later at the East Coast and Europe when no ships come in.

What will GM do? They’ll wait it out. GM CEO Dan Akerson told reporters in Sao Paulo, where he was to fete the opening of a third shift at GM’s Sao Caetano do Sul plant, that GM will assess any parts problems in two weeks, says Reuters.  “I would say over the next week or two we will have a better understanding not only about what is happening in Japan but also where we are on an inventory basis around the globe,” Akerson said.

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14 Comments on “GM Pummeled By Japanese Tsunami, Akerson Waits...”


  • avatar
    GS650G

    I don’t see the problem. GM will just ask for a few billion dollars from the taxpayers to tide them over. No problem.

    • 0 avatar
      mike978

      Get over it!
      You know they will not ask for any extra help – that was a one time event, largely paid back.

    • 0 avatar
      KitaIkki

      Government Motors Death Watch II

    • 0 avatar
      FleetofWheel

      “You know they will not ask for any extra help – that was a one time event, largely paid back.”
       
      The main rationale for the bailout was that GM had too many employees and linkages with the US economy to let fail. Thus, you will be among the first to tout another bailout for GM since they are still too big to fail.
       
      Second, GM is many billions short of paying back all the money they received.
      You may not be paying attention here on TTAC but everyone else is and your post is Silvy-esque in lack of factual basis.

  • avatar
    vww12

    A bunch of VWs, even among those assembled in Europe such as V8 Phaetons and V8 Touaregs, use Japanese transmissions from Aisin.  Consequences will ripple through the value-added chain.

  • avatar
    Dimwit

    This is just the start and nobody will be able to duck it. And, sadly, this is not going to be a temporary problem. With the Fukushima issue the rolling blackouts will be affecting all parts suppliers in Japan.
    I wonder how this will affect the JIT system?

  • avatar
    Philosophil

    Here’s an interesting question (and I realize that a real comparison would be difficult because of differences in density and scale, but I ask it only hypothetically).
     
    While it’s pretty clear that at least some North American production (e.g., GM) is dependent on parts from Japan (and other places), are places like Japan equally dependent on parts from North America? In other words, if parts production were to be disrupted in North America, would it affect vehicle production  for Toyota, Honda, and so on in Japan (and other places)? I’m just curious as to whether the interdependence works both ways, or whether it is more one-directional.

    • 0 avatar
      YotaCarFan

      Toyota imports some parts from North America for its Japanese-made cars: Johnson Controls’ Mexico plant makes garage door opener electronic modules, tires are sometimes sourced from the US, and IIRC Canada makes some of the wooden steering wheels for Lexus cars.  They use Ampex electrical connectors on ECM harnesses, too, but I don’t know where they’re sourced.

  • avatar
    whynotaztec

    this can be very complicated to analyze.  Consider the suppliers could be directly impacted by quake damage, or loss of employees, or collateral damage such as loss of transport infrastructure of the effect of rolling blackouts.  Also need to realize that some parts could be sourced from elsewhere.  But it all boils down to one puzzling question really – GM is still building Colorados???????????

  • avatar
    eldard

    Batteries for hybrids are mined in Canada, shipped to Japan, then shipped back to North America. All the while using untold shipping oil. Very eco-friendly indeed!

    *meant as a reply to Philosophil

  • avatar
    Robert Schwartz

    How many layers are there in automobile sourcing? Could it be that we won’t know the full impact for months as third and fourth tier suppliers make their lack of production known?

  • avatar
    Lorenzo

    On the plus side, Japan isn’t the sole source for all the high value electrical components. Japan makes 25% of the world’s flash memory chips, but 75% of the world’s production is intact.
     
    On the minus side, those alternate sources probably can’t scale up production to replace Japanese output, so there will be shortages and cancelled production of low-demand vehicles, leading to lowered profits. Those alternate suppliers are likely going to charge an arm and a leg, leading to even lower profits and higher car prices.
     
    One thing to watch for is which automakers do the best job of scooping up the alternate suppliers’ production. That could be a race for survival for some automakers.

  • avatar
    CJinSD

    GM is fundamentally frail and they’ve been looking to cherry pick an excuse for their financial weakness. The Japanese Tsunami might be just the trick they need to get their filthy paws back in our pockets via the loop between organized crime and corrupt politicians.

    • 0 avatar
      Steven02

      No, GM is not fundamentally frail.  Since their debt is largely gone, they are in good shape.  This article only focuses on the problems GM is having from the this quake.  Many other manufactures are going to have problems soon as well.  Seriously, 4 plants have been listed here.  How many plants in Japan have closed?  What kind of parts shortages are they having?  When they are waiting on parts, other part suppliers in other countries will have to idle their plants as well.  This is going to effect everyone.

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