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Toyota Motor Corp. will suspend vehicle production in North America for five days this month because of continuing shortages of components from Japanese suppliers damaged in last month's massive earthquake.
Japan's largest automaker had warned that its North American operations would be affected by the quake and tsunami that disrupted its Japanese supply lines.
Toyota assembly operations in Japan have been largely halted since March 14, but the company announced Friday that it would resume domestic vehicle production on April 18. The output would be around half the normal level, however, in the latest of several indications that the restoration of Japan's auto industry is likely to be a slow and halting process.
Nissan Motor Co. and Honda Motor Co. also plan to resume production in Japan this month, but at lower-than-normal levels.
On Friday, Toyota said production would be suspended at its North American assembly plants on April 15, 18, 22 and 25.All but the Georgetown, Ky., plant will be halted on April 21, resulting in lost output of 35,000 vehicles.
Toyota will suspend production at most of its engine and component plants in the region on those days.
"It was inevitable that disruptions to suppliers in Japan would trickle down to North American operations," said Bill Visnic, analyst at auto research firm Edmunds.com.
Toyota said assembly line workers may report for training and plant improvement activities, use vacation days, or take unpaid time off.
The automaker employs 25,000 workers, called team members, in North America.
"We are slowing down to conserve parts yet maintain production as much as possible," said Steve St. Angelo, executive vice president of Erlanger, Ky.-based Toyota Motor Engineering and Manufacturing North America.
Nissan also has scheduled production stoppages in the United States and in Mexico, while Honda has reduced production schedules in the region.
Toyota said it would restart its auto-assembly operations in Japan from April 18 to 27. It will then halt output from April 28 to May 9, a period that includes the Golden Week holidays when plants are normally closed.
"A decision on post-holiday production will be made after assessing the parts supply situation," Toyota said in a statement.
Company officials said they were gradually restoring supply lines. Toyota is still having trouble obtaining around 150 components, but that is down from 500 components that were in short supply right after the quake.
"There are problems with parts supply," Toyota President Akio Toyoda told reporters Friday in Nagoya. "But each day, we are doing our utmost to improve the conditions so that we can deliver cars to many customers."
Toyota has been producing the Prius and other hybrids made only in Japan.
It also has been turning out components in Japan to provide dealers with replacement parts and keep its overseas plants running, but cautioned that they also would be affected.
In a bearish research note, Noriyuki Matsushima, a Tokyo-based analyst at Citi Investment Research & Analysis, said the quake's impact has been underestimated.
In his worst-case scenario, he anticipates record losses for the Japanese auto sector for the first half of the new fiscal year, which began on April 1, "surpassing even those posted at the time of the Lehman Brothers bankruptcy," he wrote. "We now rate all major automakers 'Sell.'"
In addition to the damage caused by the March 11 quake, the strongest on record in Japan, an ensuing tsunami destroyed many small parts makers in the northeastern part of Honshu, the country's most populous island.
Other firms are off-limits because of radiation that has leaked from the crippled Fukushima Daiichi nuclear plant complex.
Restoring the supply chains will take time, Matsushima said.
"We anticipate an average industry operating rate of around 40 percent in the first quarter of the 2012 fiscal year, and expect many automakers to post large losses for the quarter," he said.
Japan's fiscal first quarter runs from April through June.
Moody's Investors Service said this week that it may downgrade Toyota's credit rating.
From The Detroit News: Toyota to suspend U.S. assembly for five days | detnews.com | The Detroit News
Toyota Motor Corp. will suspend vehicle production in North America for five days this month because of continuing shortages of components from Japanese suppliers damaged in last month's massive earthquake.
Japan's largest automaker had warned that its North American operations would be affected by the quake and tsunami that disrupted its Japanese supply lines.
Toyota assembly operations in Japan have been largely halted since March 14, but the company announced Friday that it would resume domestic vehicle production on April 18. The output would be around half the normal level, however, in the latest of several indications that the restoration of Japan's auto industry is likely to be a slow and halting process.
Nissan Motor Co. and Honda Motor Co. also plan to resume production in Japan this month, but at lower-than-normal levels.
On Friday, Toyota said production would be suspended at its North American assembly plants on April 15, 18, 22 and 25.All but the Georgetown, Ky., plant will be halted on April 21, resulting in lost output of 35,000 vehicles.
Toyota will suspend production at most of its engine and component plants in the region on those days.
"It was inevitable that disruptions to suppliers in Japan would trickle down to North American operations," said Bill Visnic, analyst at auto research firm Edmunds.com.
Toyota said assembly line workers may report for training and plant improvement activities, use vacation days, or take unpaid time off.
The automaker employs 25,000 workers, called team members, in North America.
"We are slowing down to conserve parts yet maintain production as much as possible," said Steve St. Angelo, executive vice president of Erlanger, Ky.-based Toyota Motor Engineering and Manufacturing North America.
Nissan also has scheduled production stoppages in the United States and in Mexico, while Honda has reduced production schedules in the region.
Toyota said it would restart its auto-assembly operations in Japan from April 18 to 27. It will then halt output from April 28 to May 9, a period that includes the Golden Week holidays when plants are normally closed.
"A decision on post-holiday production will be made after assessing the parts supply situation," Toyota said in a statement.
Company officials said they were gradually restoring supply lines. Toyota is still having trouble obtaining around 150 components, but that is down from 500 components that were in short supply right after the quake.
"There are problems with parts supply," Toyota President Akio Toyoda told reporters Friday in Nagoya. "But each day, we are doing our utmost to improve the conditions so that we can deliver cars to many customers."
Toyota has been producing the Prius and other hybrids made only in Japan.
It also has been turning out components in Japan to provide dealers with replacement parts and keep its overseas plants running, but cautioned that they also would be affected.
In a bearish research note, Noriyuki Matsushima, a Tokyo-based analyst at Citi Investment Research & Analysis, said the quake's impact has been underestimated.
In his worst-case scenario, he anticipates record losses for the Japanese auto sector for the first half of the new fiscal year, which began on April 1, "surpassing even those posted at the time of the Lehman Brothers bankruptcy," he wrote. "We now rate all major automakers 'Sell.'"
In addition to the damage caused by the March 11 quake, the strongest on record in Japan, an ensuing tsunami destroyed many small parts makers in the northeastern part of Honshu, the country's most populous island.
Other firms are off-limits because of radiation that has leaked from the crippled Fukushima Daiichi nuclear plant complex.
Restoring the supply chains will take time, Matsushima said.
"We anticipate an average industry operating rate of around 40 percent in the first quarter of the 2012 fiscal year, and expect many automakers to post large losses for the quarter," he said.
Japan's fiscal first quarter runs from April through June.
Moody's Investors Service said this week that it may downgrade Toyota's credit rating.
From The Detroit News: Toyota to suspend U.S. assembly for five days | detnews.com | The Detroit News
