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Toyota’s U.S. Plants Down for a Week

Production of new Honda Civic won’t recover until “sometime” in autumn.

by on May.27, 2011

The 2012 Honda Civic will remain in short supply until at least the coming autumn.

Toyota’s entire U.S. production network will be sitting idle next week, the maker deciding to stretch out the normal Memorial Day holiday break because of ongoing shortages of Japanese-made parts.

Honda, meanwhile, says that while its global factory network appears to be recovering faster than it first anticipated it will be facing more problems getting production up to speed for the new 2012 Civic model, which is likely not to reach normal volumes until “sometime” in autumn.

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A new report underscores the magnitude of the crisis touched off by Japan’s March 11 earthquake and tsunami.  In Japan, Toyota production was off by 74.5% for all of April, while its global production declined 48%.

The disaster had only marginal impact on automotive assembly plants but 100s of supplier facilities were damaged or destroyed.  Others have been struggling under the rolling blackouts implemented after the quake touched off a triple meltdown at the Fukushima nuclear plant.

Toyota, which is heavily dependent upon a Japanese-centered production system, suffered the biggest loss of production, about 350,000 vehicles in total for April.  But Honda also was impacted quite severely, losing 81% of its Japanese production and 52.9% of its worldwide output for the month.  Nissan, with a smaller domestic Japanese production base saw home market production fall 48.7%, and its global output drop 22.4% for April.

With their automaker clients – both Japanese and foreign – lending support, Japanese suppliers are coming back online faster than many analysts had feared.  A key pigment plant run by Merck resumed operations this month and a major source of automotive computer chips run by Renesas is expected to begin limited output shortly.

Nonetheless, supplies are still short, and depending on the individual part and vehicle, production remains well below normal capacity.

Toyota idled its entire Canadian production system this past week, and will close all of its U.S. plants for an extended Memorial Day holiday next week.  The maker expects overall North American production to be at 70% of normal for June and July, with eight models back to normal levels.  Still running slow are the RAV44, RX350, Tacoma and Tunda nameplates.

Honda, which operates seven plants in the U.S., Canada and Mexico, will be operating at about 50% of its North American capacity in the weeks ahead.  Unfortunately, for the maker one of the products hardest hit is the new version of its Civic compact, which had been in high demand as it came to market just as the quake struck.

The Civic is assembled in two plants, one in Indiana, the other in Ontario, and those operations are not expected to resume normal production levels until “sometime in the fall,” Honda stated.

Despite that setback, the automaker’s chief U.S. executive issued an upbeat assessment, declaring, “The light at the end of the tunnel is glowing brighter for us, represented by this significant improvement in our production situation.”

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3 Responses to “Toyota’s U.S. Plants Down for a Week”

  1. r123t says:

    Question: when Toyota shuts down operations for a week or two, do their workers have some sort of supplemental unemployment benefits that pay, in addition to state unemployment, up to about 90% of their regular pay, or do they just take it on the chin and lose a heck of a lot of pay? I know Toyota has a “jobs bank” that they refuse to acknowledge, as was used in San Antonio when truck production was slow, but are the workers protected against shorter term shut downs? Just curious.

    • Paul A. Eisenstein says:

      My understanding is that Toyota has maintained a policy of keeping workers employed, meaning they receive normal pay and benefits during these slowdowns.
      A cynic would say they are trying to avoid angering workers and thus giving the UAW an opportunity to organize the company’s U.S. plants — much as pay and benefits largely mirror what the union negotiates in its Big Three domestic contracts.
      Whatever the case, I assume workers are quite pleased to be getting a vacation with full coverage this week.
      Paul A. Eisenstein

      • r123t says:

        Thank you, Paul, for your response. As a UAW retiree, I have been for years aware of the criticism that the UAW received for the “jobs bank” program that is no longer in force and even of the SUB program that I was privileged to be protected by during my active years at GM. I always felt that the UAW served as a “quais-union” for Toyota, and yes, that put me in the category of a cynic, much as you stated in your response.
        Yes, I too assume the workers are happy with a paid week off; a “thank you” letter to the UAW offices, an unofficial letter of course, would surely be appreciated. One wonders, what with the new VW plant in Tennessee opening with a wage package substantially lower than the Toyota package, if a few Toyota workers are now looking over their shoulders and might be ready to sign that same “thank you” letter.
        In any event, thank you again for your response.