Posted on 03/13/2011 7:40:45 AM PDT by TigerLikesRooster
Japanese car giants shut down production plants
James Quinn and Jamie Dunkley
March 14, 2011
JAPAN'S car industry has announced a major shutdown as fears grow over the economic impact of Friday's earthquake and tsunami.
The three largest motor manufacturers - Toyota, Honda and Nissan - said they would stop production at almost all of their domestic assembly plants. Electronics powerhouse Sony also said that it would be shutting down production.
Between them, the three car companies closed 22 assembly plants, while Sony halted production at six of its domestic plants.
Gerard Lyons, chief economist at Standard Chartered, warned of possible temporary price stagflation and a downward move for the country's economy.
''The timing of the disaster could not have been much worse,'' admitted analysts at Capital Economics, pointing to Japan's economic contraction in the last three months of 2010.
(Excerpt) Read more at businessday.com.au ...
P!
It is situations like this where “just in time” manufacturing systems fail.
Yes and no. At least they didn’t have billions invested in parts just get destroyed, which they would have under the old style production systems.
Hmmmm...if ‘more money chasing the same amount of goods’ leads to inflation, I wonder what will happen to global inflation with Japan’s manufacturing base essentially being shutdown.
IIRC, in December, China reduced its maufacturing rate in order to get higher prices on exported goods. We might have a perfect storm in place for inflation.
Japan is geographically tiny. This thing could really wipe them out, economically. I think this is easily their worst disaster since losing WWII (or am I stating the obvious?).
I wonder what’s going to happen to Ford stock Monday?
The article doesn’t mention whether these plants and factories are in the rolling blackout areas or if they have power at all. Also, the ports on the NE areas are gone. Horendous!
Glad you’re okay TLR!
Good point.
black swan for the world economy?
Will their stock market be open in Japan?What effect will this disaster have on the Yen?
This disaster is the physical equivalent of a major military attack on Japan, Inc. An extremely effective and serious one.
Between Japan quake and Mideast unrest, we have two candidates in competition for the title of black swan.
I would anticipate that the delivery schedule will be shifted around, and some US dealers may have problems for six to eight months getting a Japanese-made vehicle. As for making up for this? Some European car makers might see an opportunity to step in and advertise more (Volkswagen & Volvo perhaps). And yes, Ford might get a ten percent boost on car sales over the next twelve months out of this.
Losing WW II was the best thing that ever happened to Japan.
I have never liked JIT. I guess it works if everything is going as planned, but one hickup and you’re done. If you relate JIT to food, look what happens if the theory fails. If you study how JIT worked in Japan, you find one flaw they never talked about. When building electronic equipment, they hired little old ladies to assemble circuit boards at home. These people would arrive at a plant, pick up a bag of parts, take them home and assemble the circuit boards. This scheme never entered into the JIT bookwork. We use to call it “Japanese Internal Trade”. Interesting thing is that it was designed by an American.
I was surprised that the Dow closed up friday.
Yep. this is going to hurt what is left of the US automotive work force.
Yep - I agree. It will be interesting to see how this all plays out.
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