Japan's Industrial Output Suffers Major Damage

Japan’s industrial output suffered major damage after one of the world’s strongest earthquakes, followed by an unprecedented tsunami hit Japan last week. Global supply chains are disrupted.

This is today’s rundown on auto plant closures.

• Toyota said in an email message: “We are placing priority on supporting the relief efforts in the regions affected and ensuring that our team members, the employees at subsidiary vehicle manufacturers and at our suppliers—and all their respective family members—are safe. To that end, we are halting production at all plants in Japan (including subsidiary vehicle manufacturers) from March 14 through March 16.” According to Automotive News [sub], ” The suspension will result in a production cut of 40,000 units.
• Honda told Reuters today that it will suspend all production in Japan “at least until March 20.” following Friday’s massive earthquake in northeastern Japan. According to Automotive News [sub], “Honda has 113 suppliers in the quake zone and still can’t get in touch with 44 of them.” Honda’s UK plant in Swindon reports no immediate impact, but is monitoring the parts supply closely. An emergency coordination center has been set up in Swindon.
• Nissan will suspend operations at its Tochigi and Iwaki plants at least until March 18, Reuters says. Tochigi is northwest of Tokyo, Iwaki is in in the hard hit Fukushima prefecture in northern Japan. Operations at Nissan plants in Oppama, Kyushu and Yokohama, as well as Nissan Shatai Co, will not resume until March 16.
• Isuzu will keep its plants closed through Friday, Japanese TV reports.
• Mitsubishi wants to re-open all three of its domestic auto plants on Wednesday, but it has yet to decide whether the production lines will be able to run the following day, The Nikkei [sub] says.
• Suzuki halted operations Monday at its six factories in Japan. Suzuki said today it will extend the closure on Tuesday and Wednesday, says The Nikkei [sub].
• Mazda has decided to suspend production at its Hiroshima and Hofu plants from the night shift on March 14 through to the night shift on March 16, 2011. “Mazda will announce any further production changes for March 17 onward as soon as a decision is made,” a company release says.

Looking at the status of the power plants, production will likely be disrupted for longer. The northeast coast ports of Hachinohe, Sendai, Ishinomaki and Onahama were so severely damaged by Friday’s disaster that they were not expected to return to operation for months, if not years, Reuters says. These are medium-sized facilities that handled mostly containers. The port closure is expected to cost Japan more than $3.4 billion in lost seaborne trade each day.

Tokyo and all ports south of Japan’s capital are operating normally.

“Overseas production could be affected as well if shutdowns become prolonged, as core components such as engines and transmissions are supplied to overseas vehicle factories from Japan,” predicted Kohei Takahashi, an auto analyst with J.P. Morgan Securities in Tokyo.