Japan's Earthquake Causes Part Shortage Forcing GM to Idle Plant
It seems the devastating earthquake in Japan last week will continue to rock the global automotive industry. While several final assembly plants in Japan were idled in the wake of the disaster, it appears that idled supplier facilities will disrupt manufacturing throughout the globe. The latest plant outside Japan to experience trouble is General Motor's Shreveport, Louisiana location, which is forced to halt its operation due to a parts shortage.
GM builds its Chevrolet Colorado and GMC Canyon at the Louisiana plant, but won't disclose what component is now missing. Although unconfirmed, small batteries and microchips are rumored to be the missing parts. According to the automaker, the shortage of parts has severely disrupted production to the extent that the Shreveport plant will be shut down for at least a week, while it tries to find a different supplier.
"We will resume production at Shreveport as soon as possible, and at this point, we have sufficient vehicles to meet customer demand," GM said in a statement.
GM has experienced a significant uptick in sales for current Colorado and Canyon, with increases through the first two months of the year. Despite the increased success of the compact pickups, GM states it has a roughly 60-day supply of the two vehicles, giving it plenty of time to find a new source for the missing component. GM will be introducing an all-new version of the Colorado and Canyon later this month at the Bangkok Motor Show.
"At all other plants in North America, we continue to run normal operations," GM reaffirmed in the statement.
Auto plants typically stock four to six weeks of parts according to industry averages, which gives them time to source parts from non-affected areas if available. Automakers have moved to sourcing parts local to where final assembly occurs, but in many instances it is near impossible to avoid international sourcing. While localization may be in effect, it can take a shortage of just one part to shut down a plant. While global automakers remain positive about continuing regular operations, many are concerned as to what the next few weeks will bring following the disaster in Japan.