Tuesday, March 15, 2011
Japan's Crisis and the Auto Industry
I know this is a very new and uncertain topic, but the thought of how the disaster in Japan effects the rest of the world and the business world is very interesting. I know questions have already been raised about how the nuclear crisis will influence the nuclear power situation in the rest of the world. In this article, however, I found it intriguing the way in which Japan's crisis could effect the auto industry. The loss of thousands of vehicles, parts, raw materials and factories will greatly influence the world's new supply. It also stated that Japan manufactures the batteries central to US car producers hybrid cars. It's just amazing how one country's struggles influence the rest of the world.
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The news continues to get worse out of Japan, as I write this the nuclear plants are unstable and unsafe. It will be a very long time before life for the people of Japan has any sort of nornal signs. Japan is a super big player in the auto industry. This natural disaster will impact the United States in a significant way. Once again the United States needs to examine the resources we have available and how to make ourselves less dependant on other nations to keep us up and running in our manufacturing plants. The article speaks about the hundreds of thousands of autos that have been destroyed and will not make their way to American soil. I forsee the demand for imports to be very tight and prices to rise. On the other hand this could be a wake up call for Americans to buy American products and support our own economy.
ReplyDeleteI agree that American manufacturing has to find a more secure way of getting parts for their manufacturing operations. This doesn't need be domestic. There needs to be alternatives to Japanese parts. I remember when I was a young farm kid. People always said it is a bad decision to menoculture. Spread the risk by not just producing just one crop. the same can be said for rlying on just one source for manufacturing products. In the case of Jpanese loosing market share, that is a real likeyhood. Korea and China probably stand to gain the most ground, But I'm certain there will be a great amount of loyalty to Japanese products. Japan has a track record of rebounding from disaster quickly. So I see it as lasting until they get back on their feet. The scopr of the disaster is epic, but New Orleans' disaster seemmed insurmountable too. It has come back. Japan will too.
ReplyDeleteAs your article stated, the "just-in-time" factories here in North America such as Nissan and Honda will feel an extreme impact; probably have already. Not only the factories in Japan that produce components are destroyed, but many of the ports that handle the goods for imports and exports are destroyed.
ReplyDeleteMany businesses that I have worked with do have contingency plans, and dual source the main components, but when the tooling dollars start to add up the dual sourcing often times is waived. This will have a global impact and have many firms looking at the way they do business and their contingency plans.