Parts Paralysis: Honda U.S., Canada, And Mexico To Be Next

Bertel Schmitt
by Bertel Schmitt

As early as a week from now, Honda’s North American production in Ohio, Alabama, Indiana, Canada and Mexico will be affected by the Japanese parts paralysis. Bloomberg talked to Natsuno Asanuma, Honda’s spokeswoman in Tokyo. She said workers will be informed once Honda has decided on a production plan.

The Columbus Dispatch reports from Ohio that “temporary interruptions” will begin there on April 4, and that Honda “does not yet know how much of its production may be halted, the duration or how the changes may affect employees.”

Honda gets more than 80 percent of its U.S. sales from vehicles made at North American plants, the highest proportion among Japan’s carmakers. This does not shelter the production from parts outages in Japan. In Japan, Honda’s supplier base is one of the hardest hit.

“This is just a beginning,” Mitsuo Shimizu, an equity analyst at Cosmo Securities Co. in Tokyo told Bloomberg. “More companies will be forced to suspend production. ” One does not need to be a sage to come to that conclusion.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • OldandSlow OldandSlow on Mar 27, 2011

    Just because you are buying a vehicle from the Detroit 3, it doesn't mean that all of its parts are sourced from North America. I remember the ruckus on some forums when GM put a Chinese engine and a Japanese transmission in their Chevrolet Equinox. http://wot.motortrend.com/gm-putting-chinese-engines-in-its-compact-suvssince-2005-247.html Ford uses Kumho tires that are made in China on their low-end F150.

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    • Kevy69 Kevy69 on Mar 27, 2011

      GM Canada builds V6 and V8 Engines http://www.gm.ca/inm/gmcanada/english/about/Overview/operations_ste_cath_Glendale.htm Manufacturing Facilities - St. Catharines Powertrain, Glendale Ave. Location:

      General Motors of Canada Limited 570 Glendale Avenue St. Catharines, Ontario Description: The St. Catharines Engine Plant machines parts and assembles GM's famous Vortec brand of engines. The plant currently assembles 4.0L, 5.3L and 5.7L V8 GEN III Engines. 3.6L and 2.8L HFV6 Engines. As well, specific engine components such as aluminum blocks, cast-iron blocks, cranks, heads, rods and cams are also manufactured.
  • BuzzDog BuzzDog on Mar 27, 2011

    Not only is the solution more complicated than saying we should "buy American" (due to numerous Japanese parts in "American" cars), even if were that simple I'm afraid the dealers of U.S.-built vehicles would screw things up in the long-run. If - and I repeat, IF - there were an ample and ready supply of U.S.-built vehicles built without Japanese parts, here is my opinion of what would play out: Instead of using this opportunity to build long-term relationships and goodwill by selling U.S.-built vehicles to former import buyers at a fair price, past experience suggests that dealers would instead turn to price gouging, claiming that "supplies are low." Then, when supplies of Japanese vehicles and parts stabilize, those who bought U.S.-built vehicles during the shortage will find that their trade-in value is relatively low, because the original price paid was too high, and because used vehicles will be competing with a pent-up demand for Japanese vehicles. So a possible long-time buyer of American vehicles will again be lost forever, because they "simply don't hold their value." Yes, it's the simple law of supply and demand, but it illustrates how our addiction to short-term profit may be killing any hope for long-term, sustainable growth and profitability of the domestic vehicle industry.

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    • BuzzDog BuzzDog on Mar 30, 2011

      Oh, yes, I was buying cars back then. And you're right, the Japanese dealers were gouging customers right and left. But there is a huge difference between the Japanese dealers of the 1980s and the domestic dealers of the 2010s: Japanese cars back then were in short supply AND of perceived higher quality; domestic vehicles in my hypothetical scenario would be in short supply, but not of perceived higher quality. In other words, buyers would choose the domestic product as a substitute - because there are limited choices. Unless these buyers are treated well, there's little or no chance they will return. It doesn't do our domestic industry any favors.

  • Mhadi Mhadi on Mar 27, 2011

    No more instant gratification... upto recently (last 30 years), it was normal to wait for something if you wanted it. The Mercedes S123 had a two year waiting list in the early 1980s I believe. I predict those who want a Japanese or European car will not "buy American" simply because they cannot get their car tomorrow - they will learn to wait a few months.

  • Joe_thousandaire Joe_thousandaire on Mar 27, 2011

    Bertel - I would love to see a post about that parts crisis as it applies specifically to the domestic automakers, I've heard only whats been in the MSM (Chevy Colorado plant shutting, Ford paint problems) but I'm really wondering if U.S. manufacturers will come out as 'winners' in this crisis, or if everyone loses. Any information that you or the B&B might have on specific U.S. part supply problems beyond mere speculation would be of great interest.

    • Bertel Schmitt Bertel Schmitt on Mar 28, 2011

      I don't know. All I know has been written here. Whenever I find out more, it will be written here. If even the Japanese manufacturers have no clear picture, how should I? Currently, the Japanese have visibility as far as the tier 1 suppliers go. Further on, no idea. There are small machine shops in Japan that deliver a high precision part to a tier 2 supplier who supplies a tier 1 supplier. The machine shop could be at the bottom of the sea. If Japan doesn't know how many people have died (currently, they know 10,000 for sure and 16,000 "missing") how should they know which widget will go missing?

      Any hard and reliable information won't be found on a free site. It would be worth my considerable weight in gold. All I know is that the parts paralysis will be like the flu. Indiscriminate, widespread, causing sniffles to some, death to others, will affect the frail more than the robust, could turn into a pandemic or just into a spike of sales of NyQuil. What is telling is that the first to get hit in the U.S. was a domestic manufacturer. Who would have thought that red and black paint becomes scarce? Prepare to be surprised.

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