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Nissan resumes limited Japan output, other automakers set to restart some plants

22 March 2011

Nissan resumes limited Japan output, other automakers set to restart some plants

Some Japanese companies resumed limited production of auto parts in Japan beginning today, taking another step to restart operations following an earthquake, tsunami and nuclear crisis that has disrupted industrial output across the country for more than a week now.

Manufacturers are also facing rolling power outages, aftershocks and delays in the supply chain.

Nissan resumed output at some parts factories Monday, and will start up operations at six other plants and some vehicle assembly plants on Thursday. Nissan's facilities in Iwaki, located in the same prefecture where Tokyo Electric Power Co. workers are battling to avert a nuclear meltdown, aren't getting enough water, electricity and gas to operate. The affected Nissan sites include a key engine plant.

 Toyota, Japan's biggest automaker, plans to keep 21 auto and components plants closed until Tuesday, when it will reassess production plans. It plans to resume output of key parts for overseas assembly plants this week. Toyota is facing worst-case scenarios of long-term production shortfalls as factories remain closed and workers are idled in the aftermath of the March 11 earthquake and tsunami.

Toyota's efforts to resume production are complicated by the need for hundreds of different components to build cars from a variety of different suppliers that may have suffered plant damage during the quake and tsunami.

"This will be played out not in days, but in weeks," said John Hoffecker, head of the automotive practice at consulting firm AlixPartners LLP in Detroit. "Nothing on this scale has really occurred before."

Volvo, the Swedish automaker, was working with just a 10-day supply of Japanese-built navigation and climate control systems, The New York Times reported today.

Toyota's shutdown affects about 95,000 units of production, of which 60% is for shipment to markets.

Honda has closed six factories, including three car factories and one motorcycle assembly plant that will be shut until Wednesday, the company says.

Honda, which builds more than 80% of its vehicles for the U.S. market in North American plants, has suspended orders from U.S. dealers for Japan-built models. Honda told U.S. Honda and Acura dealers, who typically order vehicles six weeks in advance, of the plan in a memo last week.

Mazda and Suzuki will reopen plants on Tuesday.

General Motors' South Korean unit will cut overtime work at two of three factories for a week starting today, on concerns part supplies from Japan will be interrupted, GM Korea Co. spokesman Kim Sung Soo said.

The automaker's Korean unit imports 4 percent of its auto parts from Japan for two models -- the Chevrolet Spark mini car and the Chevrolet Cruze compact, The Wall Street Journal reported. The cut in overtime will trim output by 10 percent. GM Korea has been producing about 70,000 to 80,000 units a month.

GM is also idling a U.S. pickup truck plant in Louisiana this week. In Europe, output of the Corsa small car has been suspended at plants in Spain and Germany because of a lack of Japanese-made parts.

The automaker has also suspended all nonessential spending and global travel while the automaker assesses the impact of the crisis in Japan on the company.

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