JAPAN DISASTER: Supply disruptions continue to roil US automakers

08 April 2011 21:37  [Source: ICIS news]

HOUSTON (ICIS)--Supply disruptions of Japanese auto parts have led to temporary shutdowns and overtime cancellations by some North American automakers, companies said on Friday.

Chrysler cancelled overtime at two of its North American plants, said Katie Hepler, purchasing communications manager for Chrysler, in a statement.

“We have not experienced any disruptions to regularly scheduled production as a result of the issues in Japan,” Hepler said. “We are, however, taking some planned overtime out of our production schedule in an effort to conserve supplier parts that are potentially impacted by the disaster.”

Ford closed its Kentucky truck plant this week, said George Pipas, sales analyst for Ford. The plant will reopen next week, Pipas said.

Honda announced plans to extend temporary levels of reduced production by one week through 22 April, the company said in a statement. The company began reducing production at its US and Canadian auto plants on 30 March as a result of interruptions in parts supplies.

Honda suggested parts shortages could hinder its production for 60-90 days, according to a research note by Jefferies & Co, an investment bank.

This latest round of production slowdowns comes on the heels of announcements last week by Nissan that it would close three US plants for six days, and two plants in Mexico for five days, with plans to make up production in both countries through the balance of its fiscal year.

The auto parts shortages stem from disruptions caused by the 11 March earthquake and tsunami in Japan.

A 7.1-magnitude aftershock struck the country’s northeast region on Thursday.

Automobiles are a large end market for materials such as polypropylene (PP), nylon, acrylonitrile butadiene styrene (ABS), polyurethane flexible foam, synthetic rubber and paints and coatings.

The American Chemistry Council (ACC) estimates that each automobile contains an average of $2,700 (€1,890) worth of chemicals.

($1 = €0.70)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy

By: Michelle Klump
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