Thai Floods Drown Hopes For Fast Recovery Of Japanese Car Industry
The persistent floods in Thailand did cost Japanese automakers already close to 200,000 unbuilt vehicles, and no end of the floods is in sight. This is putting a severe crimp into the major push that was planned for the last quarter of 2011 and the fist quarter of 2012 to make up for lost production after the March 11 tsunami.
Here is a current tally by The Nikkei [sub].
Toyota: 100,000 units
Except for Honda, where the plant in Thailand is under 6 feet of water, most automakers had to stop production due to a shortage of parts. Parts will now be brought in from other countries, and some production is planned to resume shortly.
The flood may affect you even if you are not in the market for cars: Hard disks, digital cameras, and other gadgetry are already in short supply, causing panic at electronics retailers getting ready for the year-end shopping season.
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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Thanks to the floods, hard drives have almost doubled in price recently. I always thought just-in-time manufacturing would get us in trouble at some point. When you have very little inventory, and little spare capacity, one sufficiently large disruption in your supply chain can kill your business. Things will be tight for a while in the automobile and tech business, at least for the next few months.
Suits them right, they outsourced everything as far East as they could. Because there are low wages, low environmental protection standards, resulting in one of the cheapest locations to produce cars. If Taiwan wil be too expensive some time they will shift production perhaps to Bangladesh or Africa etc. Somebody will have to learn that polluting the enviroment uncontrollably will backfire in floods etc. Some regimes like China may still have the power to suppress the growing anger and despair of the poor while a chosen few are literaly drowning in money. But this will also end ... political factors should be taken into account when planning a factory as well. Or to put it in the words of Karl Marx: "In every stock-jobbing swindle everyone knows that some time or other the crash must come, but every one hopes that it may fall on the head of his neighbour, after he himself has caught the shower of gold and placed it in safety."
HAARP at work.
Poor Thai workers! Are they being paid by the automakers while the plants are down?