INDIANAPOLIS
(AP) — Shortages of auto parts from earthquake-stricken Japan could lead
to layoffs at some Indiana factories in the coming weeks.
Business
analysts don't expect large cutbacks, but anticipate that some Indiana
plants that employ about 50,000 autoworkers will use short workweeks,
scattered short-term layoffs and slower line speeds to keep workers busy
during the downturn.
"I'm not sure
it's going to be a major event. It's not clear yet," said economist Thomas
Klier of the Federal Reserve Bank of Chicago told The Indianapolis Star.
"We still don't know what the extent of the damage actually is in Japan."
Trying to
determine which plants might be affected by the tumult in Japan is made
difficult by the global supply chain that has developed in recent years.
Subaru, Toyota and Honda assemble vehicles in Indiana, but the supply
system runs to almost every major automaker.
Almost all of
the ships that left Japan for the United States before the March 11
earthquake and tsunami should reach port by next week. But it could take
three or four weeks for the disruption in shipping to affect a U.S.
auto-parts supplier.
"It only takes
a shortage of one part (to bring down an auto plant). No one knows what
part it's going to be," said Alan Jones, vice president of Muncie-based
Mursix Corp., owner of auto-parts maker Twoson Tool in Muncie and Dakota
Engineering in Indianapolis.
Officials at
Toyota's factory near Princeton in southwestern Indiana, where 4,100
workers assemble minivans and sport utility vehicles, announced Thursday
that some "nonproduction days" are likely. Toyota avoids layoffs and
usually assigns crews to maintenance and training tasks.
"We're having
to assess our suppliers' condition in Japan," Toyota spokesman Mike Goss
said. "It's a big job. There's a lot of companies in Japan, several tiers,
several layers of suppliers. It's not been an easy task."
Subaru of
America said last week it was suspending overtime at its only North
American plant in Lafayette, as it assessed its ability to get parts from
Japan. The 3,300-worker factory makes the Outback wagon.
Honda, which
has a factory in the southeastern Indiana city of Greensburg, hasn't
announced any North American production changes.
When a
slowdown finally happens in Indiana, it may come abruptly to auto-parts
suppliers, which operate dozens of plants in the state.
Because of the
global supply system, "an automaker is not going to be able to tell you
with any advance notice that they are running out," said analyst Jim
Gillette in the Grand Rapids, Mich., office of market researcher IHS
Automotive.
If there is a
parts shortage, layoffs might not be immediate.
"I'd guess we
could go a couple of months before we have layoffs," said Randy Hampton,
business unit manager at auto-parts maker PMG Indiana in Columbus. "If
this goes long-term, we'd have to look at layoffs, but we'd look at this
more as an opportunity to build inventory. The auto industry has been so
good the last few months there's hardly any inventory left."
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Information
from: The Indianapolis Star, http://www.indystar.com