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Earthquake shakes Japanese carmakers due to supply chain risks

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TOKYO – On Friday morning, less than a week after a 7.3-magnitude earthquake struck northeastern Japan, an influx of cars from across the country began pouring into the suspended Hitachi plant in Fukushima Prefecture that was damaged in the unrest.

The motorcade represents a figure from Japan’s auto industry, from a car adorned with the Suzuki Motor logo to technicians in Honda Motor suits.

“I think there is someone here from nearly every Japanese automaker,” said an employee at the plant operated by Hitachi Astemo, a unit of the Japanese multinational corporation. He said about 100 people had come to help restart the facility, which has been closed since Monday due to damage from the earthquake.

Although some Hitachi Astimo lines are set to return to the internet on Saturday, the chaos following the recent earthquake has sparked renewed concerns about diversification and risk management in the Japanese auto industry.

Hitachi Astimo is the world’s largest manufacturer of hydraulic suspensions and a major supplier to many Japanese automakers. But the plant shutdown meant the company had to halt shipments of some suspension components altogether, triggering a chain reaction that caused customers to cut production as well.

Toyota halted 14, or half of its production lines, in Japan for four days due to the disruption of its parts supply. Friday it said it would extend the freeze for an additional two days until Monday at 12 of those lines. Overall, the nation’s largest automaker expects a production drop of more than 30,000 cars across a range of models, from the RAV4 SUV to the Lexus luxury line.

Not all Hitachi Astemo employees have been happy with the recovery efforts despite what appears to be a patriotic effort. Companies like Toyota [are] Responsible, it is up to the automakers when we can resume operations, ”an employee said.

Another said, “The only thing we can do is clean up.” “Nobody updates us, so I really don’t know what’s going on.”

The facility sustained electrical wiring and machinery damage from the February 13th earthquake. Although the former was repaired relatively smoothly, the company has struggled to bring any of its paint machines back online.

Despite a partial reopening on Saturday, a full recovery remains a distant goal. “The wires are still coming down from the ceiling, and I don’t think we can go back to work anytime soon,” said a worker who visited the factory on Friday. The worker was not told when to return to work.

Hitachi Astemo was launched last month through the merger of Hitachi Automotive Systems and three Honda subsidiaries, including Showa. The move, which departed from traditional Japanese corporate alliances, was intended to give the resulting entity a stronger foothold amid the rise of connected, autonomous, shared and electric cars.

The affected Fukushima plant belongs to what was previously known as Hitachi Motors, which boosted all of its pending production there in fiscal year 2019 with fewer cars being built in Japan. Although a former Showa plant in Saitama Prefecture is also on hold, this facility mostly produces products for Honda and cannot take over the Fukushima plant shortly after the merger.

One company said that the carmakers “do not have multiple suppliers of the same segment in the same model.” This meant that many relied solely on the Hitachi Astimo plant in Fukushima for a host of different vehicles, which led to widespread disruptions after the earthquake.

When chip maker Renesas Electronics suffered massive plant damage from the 2011 earthquake and tsunami, carmakers across Japan were forced to shut down their production lines. Toyota has suspended all production in the country, and has not returned to full capacity for about a month.

Renesas later made changes to prevent this from happening again, such as keeping customers updated on the number of products in stock. Although the plant itself temporarily stopped operating after the recent earthquake, it does not appear to have a major impact on car production.

But recent developments have highlighted the risks that come from streamlining production to cut costs.

“I don’t know when I can go back to work,” said an employee at the Hitachi Astimo plant in Fukushima.

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