AP, Kyodo, Nikkei, All Wrong: Toyota Not Halting U.S. Ops

Bertel Schmitt
by Bertel Schmitt

Looking at the supply chain and transit times, it was easy to predict that the big American knock-on effect of the Japanese earthquake and tsunami would start to happen around – right now. To nobody’s surprise, The Nikkei [sub] writes this Tuesday morning in Tokyo that Toyota “is highly likely to halt all manufacturing operations at its factories in North America later this month due to parts supply disruptions.” It goes on to say that “the scale and the duration of the expected shutdown have yet to be decided, but all of Toyota’s 14 factories in North America could be affected.”

I could write that and finally go to bed, but my mother had told me to believe nobody. Not even a respected newswire that gave its name to the main Japanese stock index? Not even that. An early call to Toyota HQ reaches spokesman Dion Corbett, who has a completely different story.

Corbett tells me there has been a statement by Toyota U.S. a few hours ago, and that Toyota HQ in Tokyo “confirms that statement.”

Off to the Toyota U.S. statement.

“Contrary to recent headlines, nothing has changed from our update from March 23rd regarding our North American operations.

We continue to assess our supply base in Japan following the earthquake/tsunami. We have communicated to team members, associates and dealers here that some production interruptions in North America are likely. It’s too early to predict location or duration.

Currently, the greatest majority of parts for our North America-built vehicles come from approximately 500 suppliers in North America. Also, we continue to receive parts from Japan that were already in the pipeline, limiting the immediate impact. We will continue to work closely with suppliers in North America and Japan to minimize any disruptions to Toyota’s overall North American operations. “


That indeed is the gist of what we had reported last week. There was also something about replacement parts, but nothing about plant shutdowns.

Digging around for the “headlines” Toyota was referring to, we find an AP story that says that Toyota thinks “it’s inevitable the company will be forced to shut down all of its North American factories because of parts shortages due to the earthquake that hit Japan.” Well, Toyota clearly does not think so. At least not at the moment. Last week, Toyota HQ told us that they are short 500 parts. Eventually, or possibly soon, this will reach the U.S. and have consequences. One may speculate what they are, but one may not put words in other peoples’ mouths.

The real shame is that the Nikkei had picked the false story up from Kyodo. The time stamp on the Nikkei article was 8:13 am. On 8:26 am, the Nikkei pipes up again, and writes: “Toyota Motor Corp. is highly likely to halt all manufacturing operations at its factories in North America later this month due to parts supply disruptions caused by the March 11 earthquake disaster in Japan, company officials said Monday.” They did not bother to read the email Toyota U.S. had sent out hours before, nor did they pick up the phone to call the Toyota officials in the morning. Reuters did a much better and responsible job.

After the faux power rotation story, followed by the egregiously faux Nissan/Renault/Holding story, this is the third time in a row that The Nikkei messes up. Stories like these affect stock prices and the lives of many people. Let’s be careful out there. If this goes on, then we may have to report that The Nikkei was bought by Gawker. And it may be the truth.

PS: Adding injury to insult, The Nikkei [sub] published another article at 9:41 am: “Shares in Toyota Motor Corp. opened lower Tuesday morning, weighed down by a Nikkei online report before the bell that the carmaker may have to temporarily suspend operations at all 14 of its factories in North America in April. Investors dumped the stock on concerns about smaller sales resulting from a plant suspension, which, if implemented, would be due to a slow supply of components from Japan after the March 11 quake.”

The stock subsequently went as low as 3,220 yen, to recover a bit in the afternoon session for a close at 3,260 yen.

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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  • Type57SC Type57SC on Apr 05, 2011

    Toyota and the japanese in general appear to only state what they absolutely confirmed to be so and refuse to give a best estimate. If they were 95% certain that all plants will go down, I would expect the same PR response until they were absolutely certain.

    • Bertel Schmitt Bertel Schmitt on Apr 05, 2011

      In times when you don't know the whereabouts of 15,000 people, you are a bit careful. The current official line is that 12,341 have died, and 15,347 are "unaccounted for." Should they just get over it and call them dead? No, they won't.

      I have found the Japanese majors very forthcoming with information. They tell me what they know, and they tell me when they have no idea. They tell me they will reopen by mid April. They tell me they will work at 50 percent capacity. They tell me they will work until parts run out. If I would be stupid enough to ask when that will be the case, I would get a "we don't know." They are still looking for some of their suppliers. They don't know whether they are amongst the 15,347, or amongst the 165,282 living in shelters. Prudence dictates a "we don't know." In times like these, you want to say exactly what you know - and leave the speculation to bloggers. Or wire services.

      I can't speak for "the japanese in general."

      But I am getting the impression that the true magnitude of the damage is not understood.

  • SpinnyD SpinnyD on Apr 05, 2011

    No one here has said when the shutdown is going to be, all we know is that it is coming. They are supposed to give us a 5 day warning, we'll see. Right now it looks like a tornado hit one of our suppliers here in the US is going to stop us first.

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