Thursday, March 17, 2011


From the Wall Street Journal.

General Motors Co. says it suspended production at its Shreveport, La., plant for the week of March 21 because of a parts shortage stemming from last week’s earthquake in Japan. Damage to parts suppliers and transportation networks in Japan have brought that country’s auto industry to a halt.
GM, which builds Chevrolet Colorado and GMC Canyon pickup trucks at the plant, says it currently has enough of the vehicles to meet consumer demand. But the Shreveport production stoppage could be one of many to come across the industry in the U.S. and elsewhere as car companies inevitably run short of certain components made in Japan.

Due to transportation and electrical supply disruptions the automobile manufacturing in Japan has come to a halt. While that shutdown has benefited some countries it also having a negative effect here in the U.S. as the article above explains.

Here is another example.

The disaster in Japan could slow shipments of popular cars like Toyota's Prius to auto lots. And many dealers are already taking advantage of expected shortages to raise prices.

Buyers will now typically have to pay sticker prices, instead of enjoying discounts that had been the norm for small cars and hybrids imported from Japan. Besides the Prius, models that suddenly cost more include Honda's Insight, Fit and CR-V; Toyota's Yaris; and several Acuras and Infinitis.
Small cars such as the Yaris, with a $12,955 sticker price for a base model, and the Honda Insight, priced at $18,200, are losing their typical discounts of 5 percent to 10 percent.
The price increases "will last weeks, if not months," says Jesse Toprak, vice president of industry trends and insights for, a website that tracks what cars sell for at dealerships.
This should give you an idea of how far reaching the economic effects of the earthquake will be not on just the Japanese economy but of the world economy. When workers at manufacturing plants are idled unexpectedly the costs can be enormous.

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