Production stalls after Japan quake
From trucks to electronics, supply-chain problems resulting from the disaster are surfacing worldwide.
General Motors (GM) became the first carmaker to suspend operations in the U.S. as a result of the earthquake. Starting Monday, it will close its plant in Shreveport, La., because it can't get enough parts from Japan.
That plant makes the Chevrolet Silverado and the GMC Canyon, according to Bloomberg. Analysts were surprised at how quickly GM reacted. "We didn't expect for this ripple to hit quite this fast for North American plants," said an analyst at IHS Automotive.
Toyota (TM) can't get parts either and has pulled the plug on overtime and holiday work at its 14 North American plants, according to Kyodo News. The plants have only about two weeks' worth of parts left.
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Toyota makes cars in the U.S. but gets about 20% of its parts from Japan. Toyota has also delayed the opening ceremony of its new India plant and has stopped allowing overtime for employees in Thailand.
Production problems aren't limited to the auto industry. The earthquake may cause supply shortages for the iPad 2 from Apple (AAPL), according to research firm iSuppli. The company has found five key parts of the iPad 2 that come from Japanese manufacturers, including the tablet's NAND flash memory, electronic compass, system battery and touch-screen overlay glass.
"Delivery of components from all of these companies is likely to be impacted at least to some degree by logistical issues now plaguing most Japanese industries in the quake zone," writes Andrew Rassweiler of iSuppli. The NAND devices in the iPad 2 are available from alternative sources in South Korea and the U.S., he adds.
But the electronic compasses and the touch-screen glass may be harder to replace, he writes.
Component prices have spiked since the earthquake, Information Week reports. Spot prices for NAND flash memory has jumped by 10%, and DRAM system memory prices are up as much as 7%.
People dont understand how important a global economy....if we made all of our own products....unemployemnt would go up 10% or more and the only jobs we would have is service. Japanese automakers employ as many if not more than the the little three automakers.
wake up america
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The solid report comes a month after the retailer closed all of its Canadian operations.
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