"Japanese automakers, including No. 1 Toyota Motor Corp., called production halts Wednesday at factories in Japan because of quake damage at a major parts supplier.The temporary closure of auto parts maker Riken Corp.'s plant at Kashiwazaki city, near the epicenter of Monday's magnitude 6.8 quake, has forced Toyota, Nissan Motor Co. Mitsubishi Motors Corp. and Fuji Heavy Industries to scale back production. Toyota, Japan's top automaker, will stop production lines at a dozen factories centered in central Aichi prefecture Thursday afternoon and all day Friday, said Toyota spokesman Paul Nolasco.The company will assess the situation at Riken, supplier of key transmission and engine parts to Toyota, before deciding whether to resume production on Monday, he said."
Also, another AP report describes how "the world's largest nuclear plant in power-output capacity...[was] ordered...plant be shut down until its safety could be confirmed after a long list of problems -- including radiation leaks, burst pipes and fires -- came to light." The reactor plant "generates 8.2 million kilowatts of electricity" according to the same AP report.
So the combination of a major shutdown in auto production and the loss of significant electrical production capacity might just put a visible dent in Japan's GDP numbers for July. The one thing about just in time production systems is that they are vulnerable to transportation failures. Fortunately for the automakers, they likely have plenty of inventory at car lots in the US or on ships bound for foreign ports that this production shutdown won't damage their July sales numbers.
Update: The Economist followed up with an article in the same vein as this post..."After the quake, the fallout"...the article states that "Following the quake, carmakers such as Toyota, Honda and Nissan found that their system of “lean”, just-in-time manufacturing, called kanban, made them over-reliant on a single parts supplier"...
