Not All U.S. Factory Closures Are Made In Japan
All told, it takes about 3 weeks for a shipborne container from Japan to reach its destination at the West Coast. To the East Coast, it’s about 5 weeks. With the Japanese earthquake and tsunami three weeks old, we should see the first real stateside disruptions by now. And we do. But not all originate in Japan.
Ford will stop production at plants in Flat Rock and in Kentucky next week. Nissan “will adjust its production schedule,” says the Freep, “mostly because of the impact of the earthquake in Japan three weeks ago.”
At Ford’s pickup plant in Kentucky, the “undisclosed parts shortages” come at the right moment. “Demand for pickup sales has declined,” the Freep writes.
Ford halts Flat Rock not because it doesn’t have enough parts. It has way too many Mustangs. Its supply is good for 116 days.
Nissan will stop production at factories in Tennessee, Mississippi and Mexico from a few days to a week because supply of parts from Japan is getting low.
Chrysler’s Windsor, Ontario, plant will shut now next week. “The latest shutdown is caused by a shortage of 3.6-litre Pentastar engines as well as plastic components, which house fuses,” writes the Windsor Star. Oddly, “the engines are assembled in Trenton, Mich., while the plastic fuse boxes are built in Mexico.”
Meanwhile in Japan, the “auto industry faces a vexing chicken-or-egg question. Are carmakers not producing cars because they can’t get parts? Or are parts makers not supplying parts because they’re getting no orders?” Automotive News’ Asian Editor Hans Greimel found no definitive answer. “Most Tier 1 suppliers here say they are ready to go — if only their automaking customers would fire up their factories and start placing orders again. But automakers say plants are down because the parts are, too.”
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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"“Most Tier 1 suppliers here say they are ready to go — if only their automaking customers would fire up their factories and start placing orders again. But automakers say plants are down because the parts are, too.”
This isn't necessarily inconsistent. In order to build a car, the assembler must have all of the parts, not most of the parts. The vast majority of suppliers might indeed be fired up and ready to go, but only one part has to be on the unobtanium list for the all stop order to go out.