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Quake, Tsunami Deal Blow to Japanese Automakers

Deaths, injuries, damaged plants; makers curb production.

by on Mar.11, 2011

A fireball erupts from an industrial area after the devastating earthquake and tsunami struck Japan.

The massive earthquake that rocked northern Japan has dealt a hammer blow to the Japanese auto industry, which is still piecing together the impact of what is now believed to have been the worst temblor in recorded Japanese history – and the tsunami it spawned — on the country’s industrial base.

With numerous injuries and at least one death, as well as substantial physical damage, automakers large and small say they will be forced to curb production at more than a dozen plants.

“Today’s earthquake halted production at Japanese automakers in their home markets,” noted a report from Standard & Poors.

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Honda reported at least one death at its technical center north of Tokyo.  Company officials have confirmed one Honda associate died at the company’s Tochigi research and development center when a wall collapsed in a cafeteria.

More than 30 other Honda associates were injured in the Tochigi area from collapsing ceilings and other damage, according to the company, which did not provide any information about damage to the sensitive installation itself.  But Honda has halted production in at least two plants.

The toll to the overall industry is still being calculated, with managers and analysts trying to piece together information on the impact of the worst earth quake to strike Japan since the island nation began keeping records more than 150 years ago.

The earthquake also dealt a major blow to Japan’s electric grid, which appeared to have suffered widespread damage while knocking out several power plants, including at least two nuclear plants that had to shift into crisis mode.

Initial estimates are that 4 million Japanese homes are without power.

“While some (automotive) production will restart quickly, other facilities may take longer,” reported Efraim Levy, Standard & Poor’s Equity Research analyst for auto manufacturers and parts analyst.

“Some of the facilities affected are for Toyota’s exports. Also, some of the negatives, which we think are mostly temporary, include potential slowing of Japanese automotive spending,” Levy said.

Toyota has established a company-wide emergency task force to take initial measures to maintain the company’s operations.

Toyota employees at manufacturing companies in the Tohoku region, including Toyota Motor Tohoku, and Central Motor Corporation are evacuating to safe areas.  The situation is the same in the facilities on Hokkaido Japan’s northern-most island.

Nissan Motor Co. also reported closing four factories including car plants in Tochigi and Kanagawa and engine factories in Kanagawa and Fukushima, according to a spokesman from the company’s headquarters in Yokohoma, south of Tokyo. Two workers suffered minor injuries, the spokesman said. Nissan’s email servers also were sending out messages saying they were not functioning properly.

Toyota Boshoku Corp., a Toyota Motor supplier, reported damage at a plant in Miyagi, the city where some of the worst devastation occurred after the quake and tsunami. Roads were also cracked near its factory.  Denso Corp., Japan’s biggest auto-parts maker, said a plant under construction south of Miyagi was damaged.

Suzuki Motor Corp. said there is currently no reported harm to company personnel, its headquarters, or manufacturing plants, which are located in the Shizuoka Prefecture region approximately 158 miles south of Tokyo.

The earthquake’s epicenter was located 240 miles north of Tokyo.

However, the disruption from the earthquake was widespread, Suzuki officials confirmed.

“We are currently gathering information about any additional effects to Suzuki’s operations including port distribution, plant and dealership operations, as well as our vendors and suppliers located in the damaged areas,” the company said.

“Due to widespread power outages communication is challenging, but we will continue to report information as it is received,” the company’s statement said.

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