Reeling from quake, Japan automakers cut output in U.S. plants
A team member at Honda's Greensburg, Indiana, plant works on a Civic a week after the Japan earthquake.
April 9th, 2011
07:39 PM ET

Reeling from quake, Japan automakers cut output in U.S. plants

Ripple effects from the earthquake and tsunami in Japan continued to be felt by the U.S. work force this week as Japanese automakers announced cuts in plant production at North American factories.

While the cuts were expected, the news signals the long road ahead for Japan's economy, the world's third largest, and how other nations will be affected.

Japan's big three - Honda, Nissan and Toyota - and the global auto industry are  increasingly hampered by parts suppliers in Japan who are struggling in the aftermath of the worst disaster to strike the island nation since World War II.

Strong aftershocks and rolling blackouts almost a month after the magnitude-9.0 quake have continued in metropolitan Tokyo, the nation’s economic center.

Toyota said in a statement on Friday it was cutting production schedules at its North American auto plants “with production suspended on April 15, 18, 21, 22, and 25.”

“The situation in Japan affects many automakers and many other industries. Extraordinary efforts are under way to help suppliers recover,” said Steve St. Angelo, executive vice president of Toyota Motor Engineering and Manufacturing North America. “We are slowing down to conserve parts yet maintain production as much as possible,” he said in the statement.

During shutdowns, Toyota has a custom of continuing to pay its workers while finding them other work - sometimes as volunteers in the factories' communities.

On Friday, the company said it would provide employment for its 25,000 full-time workers, who it calls team members.  "Team members not required to work may report to work for training and plant improvement activities, use vacation or take unpaid time off," the company said.

Toyota also announced Friday that it would resume output at all its Japanese factories on April 18, but at 50% capacity.

With the spring and summer auto-buying season approaching, the situation is starting to worry Wall Street.

"The issue of potential supply shortage is a top global priority," Morgan Stanley said in a recent report. "Even a missing $5 part can stop an assembly line."

Honda Motors also announced cuts in domestic output starting next week, with more reductions based on the availability of parts.

While 80% of Honda products and parts sold in the United States are produced in North America, the automaker said “a few critical parts” come from Japan.

“Thus, the unstable parts supply situation in Japan is impacting our ability to operate our automobile plants here in North America at full strength,” the automaker said.

Also, Nissan said this week it expected 50% output at its five factories in Japan through the end of the month.

Toyota, Nissan and Honda operate about 30 major auto factories in North America, according to their respective websites.

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Filed under: 2011 tsunami • Auto Industry • Earthquake • General Motors • Honda • Toyota
soundoff (60 Responses)
  1. leeintulsa

    Things are tough all over

    April 9, 2011 at 8:10 pm | Report abuse |
  2. Jim

    Hold on, its going to be a rocky road!

    April 9, 2011 at 8:49 pm | Report abuse |
  3. DD

    I see another reccession coming

    April 9, 2011 at 8:51 pm | Report abuse |
    • Some Guy

      I see another person who can't spell

      April 9, 2011 at 9:43 pm | Report abuse |
    • Ralph

      I see DD ppl

      April 10, 2011 at 12:15 am | Report abuse |
  4. jeff G

    Maybe American automakers should learn their lession and make American made parts. Stop relying on forign countries for your parts. Put Americans to work already!!

    April 9, 2011 at 8:54 pm | Report abuse |
    • Marc

      Perhaps if Americans could spell words such as "lesson" and "foreign" correctly, they'd have an easier time finding work. Just sayin'.

      April 9, 2011 at 9:31 pm | Report abuse |
    • elnyka

      Learn to read and write and spell before trying to ditch economic advice.

      April 9, 2011 at 11:05 pm | Report abuse |
    • S1N

      Perhaps American manufacturers would be more willing to make products with all-American parts if more Americans were willing to pay the premium that comes hiring workers at American wages instead of drooling over that $2 you saved at Wal-mart.

      April 9, 2011 at 11:11 pm | Report abuse |
    • collins61

      You must be a lonely little boy Marc. At least you have your quotation marks.

      April 9, 2011 at 11:50 pm | Report abuse |
    • zizewitz

      The picking at typos or mistakes of non-english first language bloggers (like me) is the resource of persons incapable of serious arguments!!

      April 10, 2011 at 12:03 am | Report abuse |
    • tom

      If you guys were "smarter"than Jeff, you would have noticed the rest of his diction, grammar and punctuation are just fine..
      How much you wanna bet that his finger just slipped because the "i" key is right next to the "o" key....?

      April 10, 2011 at 2:06 pm | Report abuse |
  5. banasy

    Naturally a "few critical parts" are only made in Japan. It would be too easy and convenient to actually have all the parts here in the US so our unemployment doesn't go up.

    April 9, 2011 at 9:02 pm | Report abuse |
  6. CS

    My husband works for a Toyota supplier in the U.S. They keep talking about how Toyota finds everyone work & no one gets laid off, but that is exactly what happens to their thousands of suppliers. It's gonna be 2009 all over again. Loads of suppliers were laid off.

    April 9, 2011 at 9:29 pm | Report abuse |
    • Cranky old man

      Better make more sammiches!

      April 10, 2011 at 12:17 am | Report abuse |
    • negative creep

      i work for a toyota supplier in indiana. been there 9 years and have never seen anyone laid off. back in 2009 they offered people the same they are doing now: take v-days, time off, or plant improvement work for those non-production days. my company even offered a buy out package that paid very,very well. hell, 75% even got rehired!

      April 10, 2011 at 12:22 am | Report abuse |
    • Spektricide

      That's not Toyota's fault. It's up to individual suppliers to pay their own people to come in for training, etc.

      April 10, 2011 at 12:33 am | Report abuse |
  7. Demps

    Its not like they cant move production of those parts,even temporarly to other places. Its been done before by gm and others.

    April 9, 2011 at 9:30 pm | Report abuse |
  8. Name*JoeyS

    That's why having more than one supplier is necessary in a global economy.

    April 9, 2011 at 9:36 pm | Report abuse |
  9. HAWKEYE DOCTOR

    Funny, I was unaware the reccession had ended. Sure can't tell from the looks of things!

    April 9, 2011 at 9:37 pm | Report abuse |
  10. ian ez

    DONT blame me i voted for palen and compuny, well i work for bank of america and we are fcl on homes all the time, were not told to care what ho's income is, our quota is 130 loans a day, and by golly im passing all the stops, bc we profit either way, gosh i love me job, i really hope brian monihan does not find out about this.

    April 9, 2011 at 9:57 pm | Report abuse |
    • O_O

      You work at Bank of America? And you voted for "Palen and compuny" [sic]. *sigh*

      April 9, 2011 at 10:09 pm | Report abuse |
  11. ed Bailey

    Buy amrican! Then you will save money. We really don't have a lot shaking. I unloaded several semi's with ALL the display cases, furniture,appliances and coat racks you name it, to stock up a newly finished Nordstrum's store. Not one item taken off those trucks was manufactured in the USA. Mexico, Singapore, turkey,phillipines, india,china of course, and a few other inexpensive shopping areas. I told the wife we will never again even look their direction. They charge top dollar but refuse to support us. Most big businesses are that way but they want our non-existing pay check. America its all over!

    April 9, 2011 at 10:09 pm | Report abuse |
    • MEB

      First learn to spell American!

      April 9, 2011 at 10:13 pm | Report abuse |
    • collins61

      Are you unable to function and figure out this mans point because he left the e out of American and didn't capitalize? Well I guess you're not so bright after all.

      April 9, 2011 at 11:53 pm | Report abuse |
  12. Jason Glugla

    The Global economy is such a good thing. It is good not to be able to make things in the country in which you live and to be completely dependent on a communist dictatorship or other nations which may go through natural disasters as may your own.

    April 9, 2011 at 10:10 pm | Report abuse |
  13. MEB

    Can you say Disaster Recovery! Something that we have learn the definition of after 9/11 and Katrina but not followed even here in America. Toyota and Honda have plants and capacity wordwide, they should have plans to continue even if capacity gets eliminated in any one country. Something that most if not all Global Companies shoudl have plans for. Da!

    April 9, 2011 at 10:11 pm | Report abuse |
  14. g.r.r.

    This is why America needs to restart manufacturing here. We have a LARGE DIVERSIFIED NATION. We are capable of producing all of ours and at low costs. We simply need to restart these.

    April 9, 2011 at 10:19 pm | Report abuse |
    • Harald Schmidt

      ...But our U.S. billionaires/ U.S. companies like to produce everything in China instead of the USA, break our labor union and keep our wages at slave labor.

      April 9, 2011 at 11:52 pm | Report abuse |
  15. Philip

    @g.r.r...we can't compete with China. We pay over 100 dollars per barrel for crude oil. China pays about 27/bbl for the oil that they import, and China produces over 1/2 of the oil they use. It's not cheap labor that makes Chinese goods so affordable. It's cheap oil. (not to mention the largest distribution network in history)

    April 9, 2011 at 10:28 pm | Report abuse |
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