The auto industry disruptions triggered by Japan's earthquake and tsunami are about to get worse.
AP
FILE - This 2003 aerial file photo shows General Motors Corp.'s Shreveport assembly plant and the...
FILE - This 2003 aerial file photo shows General Motors Corp.'s Shreveport assembly plant and the surrounding area. The auto industry disruptions triggered by Japan's earthquake and tsunami are about to get worse. When General Motors briefly shut the pickup plant in Shreveport, La., due to a lack of parts, it caused the partial closing of a New York factory that supplies engines for those trucks. (AP Photo/The Shreveport Times, file) NO SALES, NO MAGS, MANDATORY CREDIT: SHREVEPORTTIMES.COM In the weeks ahead, car buyers will have difficulty finding the model they want in certain colors, thousands of auto plant workers will likely be told to stay home, and companies such as Toyota, Honda and others will lose billions of dollars in revenue. More than two weeks since the natural disaster, inventories of crucial car supplies — from computer chips to paint pigments — are dwindling fast as Japanese factories that make them struggle to restart.
Because parts and supplies are shipped by slow-moving boats, the real drop-off has yet to be felt by factories in the U.S., Europe and Asia. That will come by the middle of April.
"This is the biggest impact ever in the history of the automobile industry," says Koji Endo, managing director at Advanced Research Japan in Tokyo.
Much of Japan's auto industry — the second largest supplier of cars in the world — remains idle. Few plants were seriously damaged by the quake, but with supplies of water and electricity fleeting, no one can say when factories will crank up. Some auto analysts say it could be as late as this summer.
Hitachi Automotive Systems, which makes parts such as airflow sensors and drive control systems, is waiting for its suppliers to restart while dealing with its own problems. Its plants are without water and gas, and have rolling electricity blackouts. Workers are repairing crumpled ceilings, fallen walls and cleaning up shattered glass. A spokesman says he doesn't know when its plants will reopen.
The uncertainly has suppliers, automakers and dealers scrambling. And it exposes the vulnerability of the world's most complex supply chain, where 3,000 parts go into single car or truck. Each one of those parts is made up of hundreds of other pieces supplied by multiple companies. All it takes is one part to go missing or arrive late, and a vehicle can't be built.
When General Motors briefly shut a pickup plant in Shreveport, La., due to a lack of parts, it caused the partial closing of a New York factory that supplies engines for those trucks. Sweden's Volvo has warned that its production could be disrupted because it is down to a week's worth of some parts.
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