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Some Japanese Car Plants Ready to Reopen

But problems persist and could threaten GM.

by on Mar.16, 2011

Toyota pares back production of models like Camry at North American plants but resumes some Japanese operations tomorrow.

With the lights on the landmark Tokyo Tower darkened due to power shortages across the country, things are anything but back to normal in Japan, but one sign of progress comes from Toyota, which says it will reopen some of its parts plants on Thursday, though the maker will keep assembly lines shuttered until at least the 22nd.

The plants resuming operation tomorrow will supply much-needed parts to vehicles in use in Japan.  Meanwhile, Toyota said, it will resume production, next Monday, of parts needed by its overseas plants.

That’s good news for managers of assembly operations in North America, where the maker late yesterday announced it would trim overtime and Saturday hours because of the threat of possible parts shortages.  Like many so-called “transplants,” Toyota’s U.S. and Canadian assembly lines remain dependent upon many parts and components shipped in from Japan.

“It didn’t make any sense to build vehicles on overtime if we were not sure we would have enough parts,” explained spokesman Javier Moreno.  How long the slowdown will continue remains uncertain.  “We’re not sure how many parts they can send us,” said Moreno.

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Toyota isn’t the only maker worried about the impact on foreign operations.  Subaru has halted production at its Indiana plant.  And even Detroit makers are worried about parts shortages triggered by problems with Japanese suppliers.

Chris Perry, General Motors vice president of marketing, told reporters in Detroit it is possible GM’s production in the U.S. could be hurt. “It’s going to have an effect on all manufacturers,” said Perry adding the impact could extend to GM’s operations in China.


How Detroit Helped Give Its Market Away

Transplants increasingly dominate U.S. production.

by on Sep.14, 2009

Detroit dared the Japanese to "build cars where you sell them." Initially reluctant, makers like Honda -- which opened the first Japanese auto "transplant," in Marysville, Ohio, in 1982 - soon embraced the idea.

Detroit dared the Japanese to "build cars where you sell them." Initially reluctant, makers like Honda - which opened the first Japanese auto "transplant," in Marysville, Ohio, in 1982 - soon embraced the idea.

Be careful what you ask for, goes the old axiom, as you just might get it.  Someone should have told that to Harold “Red” Poling, the former Ford Motor Co. Chairman, who liked to taunt the Japanese, back in the early 1980s, to “build them where you sell them.”

Back then, the imports were still a relatively modest, if fast-growing force, and buoyed by a lopsided exchange rate, makers like Toyota and Honda were able to sharply undercut their Big Three foes.  Eliminate the yen from the equation, went the conventional Detroit wisdom, and the imports would lose their competitive edge.

It was an era when the mantra, “Buy American,” still resonated with some buyers, especially when spoken by the likes of Lee Iacocca, the Chrysler chairman and consummate TV pitchman.

Transplant to TheDetroitBureau.com

Transplant to TheDetroitBureau.com

But what really mattered to the Asian makers was the passage of so-called “voluntary” restraints on Japanese automotive imports.  The severe limits initially appeared to provide a real advantage for Detroit, immediately reducing both the sales and share of brands like Toyota.  If there weren’t enough Corollas, import-oriented buyers would have to settle for Ford Escorts and Chevrolet Cavaliers.  Better yet, Detroit could raise its prices – by hundreds of dollars per vehicle, according to research of that era, since it didn’t have to compete so hard.