The above map of many of Japan’s carmaking facilities comes to us from the Japan Automobiles Manufacturers Association via an informative article by Edward Niedermeyer of The Truth About Cars. While certainly very helpful and illustrative, bear in mind that it is by no means all-inclusive, with Toyota’s Central Motor Company facility in Miyagi prefecture and Kanto Auto Works in Iwate prefecture being two notable omissions.
Following on statements from the Toyota USA Newsroom and spokesperson Dion Corbett reported yesterday on Kaizen Factor, the Toyota Global website’s News page brings us a trio of official news releases. The first of these reads as follows:
On the Tohoku Earthquake in Japan
Since the earthquake, Toyota Motor Corporation’s (TMC’s) utmost concern has been the safety of all the team members of TMC and its related companies in the Tohoku region.
Yesterday, TMC was able to confirm that the team members of TMC, of Toyota Motor Tohoku and of TMC subsidiary vehicle manufacturers (Central Motor Corporation, Miyagi and Kanto Auto Works, Iwate) were safe.
We are continuing to try to confirm the safety of all team members’ family members.
Yesterday, because Tohoku-region team members were evacuated to a safe location, production at plants in the region was halted.
We are now conducting a detailed survey of each plant to determine the extent of any damage.
The second one is a heartwarming reminder that, amidst its own rebuilding efforts, the Toyota Motor Corporation is reaching out to help the local Tohoku area in its time of need:
On the donation from Toyota Motor Corporation
TMC is moving to donate 300 million yen for relief and recovery efforts in communities affected by the Tohoku Earthquake.
It is also considering the provision of goods and services as needed.
The 300 million yen, by the way, work out to almost $3,664,570 at today’s exchange rate of 81.86 yen per U.S. dollar. And if all this talk of money and donations moves you to do your share to help the people of Japan in rebuilding from this natural disaster, Lili Ladaga has put together a list of organizations that are working on relief and recovery in the region and accepting donations.
The third release informs us that:
Production on Monday, March 14th
Toyota has decided to suspend production at all Toyota Motor Corporation plants, as well as at all subsidiary vehicle-manufacturing plants (e.g. Central Motors, Kanto Auto), on Monday, March 14th.
It is because Toyota places utmost priority on ensuring the safety of all team members at Toyota, its subsidiary vehicle manufacturers such as Central and Kanto, and at its suppliers, as well as on confirming the safety of their family members.
In a Bloomberg article, Toyota spokeswoman Shiori Hashimoto expands a bit on this, stating that the company will suspend production at all 12 of its factories in Japan as well as its body makers on Monday 14 March and, upon confirming the safety of all its employees and assessing general conditions at the plants will then decide if it will start operations the following day.
Even amidst cautiously optimistic (given the magnitude of the earthquakes and tsunami) damage and recovery reports insofar as most carmakers facilities, the wild card in the process of returning to a semblance of normalcy is damage to the transportation infrastructure, both domestic roads and rail, as well as seaports from which Japan can export its automobiles and other goods. A Reuters article by Bernie Woodall (which also appears in a slightly longer and more comprehensive version on Automotive News) contains these ominous passages:
The massive earthquake…in Japan threatens to crimp U.S.-bound exports of Japanese vehicles and parts in coming months, straining an already stretched supply base in the recovering industry.
All major ports in Japan were shut down…after the 8.9 magnitude earthquake and tsunami. If ports remain shut for an extended period, exports of Japanese automobiles to North America could be delayed, analysts said.
“It’s a very bad situation,” said Dennis Virag, president of the Automotive Consulting Group.
“Japan has excellent ports but they’re going to be the focus of rescue efforts. I don’t know how much (non-relief shipping) is going to be going out for while,” he said.
North American-based auto plants could also be affected if parts shipments are delayed, Virag said.
Earlier this month, Toyota said slim inventory of its Lexus luxury brand were hurting sales in North America. All of the Lexus models sold in North America are made in Japan with the exception of the RX sport utility vehicle.
Baird analyst David Leiker said infrastructure damage from the quake could affect the shipments of parts and vehicles.
“The situation requires watching,” Leiker said… “The Japanese supply base ships components around the world and (this) could have a ripple effect anywhere.”
Auto manufacturing represented about 17 percent of Japan’s industrial output in 2008, according to Baird.
The severe downturn in U.S. auto sales in 2008 and 2009 drove many parts suppliers out of business and forced others to retrench sharply.
The restructuring has improved profitability for remaining suppliers but has also stretched them so thin that even relatively minor disruptions can force wide shutdowns of auto assembly plants, executives have said.
An article by Dustin Walsh of Crain’s Detroit Business focuses on the impact on carmaker suppliers but includes these informative passages:
It is unknown whether the suppliers will need to slow production because of damage to plants owned by automakers or the lower tiers of their suppliers.
Although the manufacturing impact appears limited, the biggest threat to the automotive industry is the condition of Japan’s ports after the tsunami engulfed the country’s eastern seaboard, said Mike Wall, senior manager of strategic analysis for IHS Automotive Inc.
“As of now, it seems we’ve escaped with limited damage, but the state of the ports remains a big question mark,” he said.
How the quake will affect the U.S., and particularly the auto industry supply chain, is not known.
However, the automotive industry’s move to a more regionalized supply base likely saved production in North America, Wall said.
Most Japanese automakers used to import most parts from Japan.
Rich Kwas, an auto analyst for Wells Fargo, said shipping from ports in northern Japan could be limited in the near term. But ports in central Japan, such as Tokyo and Yokohama, and southern Japan could be operating soon, he wrote in a report today.
Kwas wrote that some U.S. suppliers could benefit in the near term if Japanese automakers shift output to North America, but capacity at those U.S. operations is already an issue.
“So the ability to shift production to North America could be limited,” he wrote. “That said, Johnson Controls would likely be the biggest beneficiary if that scenario played out.”