News from Notch Consulting, Inc.

April 6, 2011

Toyota to idle North American factories

On Monday, Toyota announced it will shut down all of its North American factories due to shortages of parts from Japan. The temporary shutdown is expected to affect about 25,000 workers. The length of the shutdown is unknown and will depend on how fast Toyota’s parts plants in Japan, which supply some 15% of the components used by Toyota’s North American plants, can resume normal production levels. GM’s plant in Shreveport, Louisiana has also been idled due to supply chain problems related to the quake.
In the wake of these reports, Toyota issued a press release stating that,

Contrary to recent headlines, nothing has changed from our update from March 23rd regarding our North American operations.

We continue to assess our supply base in Japan following the earthquake/tsunami. We have communicated to team members, associates and dealers here that some production interruptions in North America are likely. It’s too early to predict location or duration.

Currently, the greatest majority of parts for our North America-built vehicles come from approximately 500 suppliers in North America. Also, we continue to receive parts from Japan that were already in the pipeline, limiting the immediate impact. We will continue to work closely with suppliers in North America and Japan to minimize any disruptions to Toyota’s overall North American operations.

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