Carmakers plan for disruptions in parts supply - - Aftermarket Business - Wholesaler, retailer automotive parts

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Carmakers plan for disruptions in parts supply

Source: Aftermarket Business

Toyota and Honda, Japan's two largest carmakers, might modify their "just-in-time" manufacturing system to avoid disruptions in production caused by possible supplier bankruptcies.

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General Motors and Chrysler are battling to restructure after they were given $13.4 billion in emergency federal loans to keep them operating through March. Detroit's woes could lead to a "supplier shock," crippling U.S. production at Japanese and other foreign carmakers, according to the Center for Automotive Research.

"We continue contingency planning" even after the bailout, Mike Goss, a spokesman for Toyota's North American manufacturing unit in Erlanger, Ky., said in an e-mail. "We hope the loans provided to Detroit will also help to stabilize suppliers, but the very slow market remains a concern for all."

The Japanese company might work with more parts makers and increase inventories to mitigate the effects of a possible collapse among its U.S. suppliers, at least half of whom also work for Detroit automakers, Goss said. A plunge in U.S. vehicle sales, to a 26-year low, has pushed GM and Chrysler to seek government aid and left as many as a third of North American component makers at risk of bankruptcy, according to consulting firm Grant Thornton.

Read the complete article from the Washington Post

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