Kai Ryssdal: Early reports this morning were that Toyota was all set to start making cars again at the 12 factories it shut down because of the earthquake. Instead, the world’s biggest automaker has pushed things back for least another week. Honda did the same thing.
It’s too early to put a precise dollar figure on the hit from factory damage and disrupted supply lines, but Marketplace’s Alisa Roth reports the ripple effects are spreading globally to factory floors and financial bottom lines.
Alisa Roth: Toyota is still trying to get in touch with all of its parts suppliers, so it can get a realistic idea of when it can start building cars in Japan again. The company estimates by next Wednesday, it will have lost production of 95,000 vehicles.
Mary Ann Keller is an industry consultant. She says there are a lot of variables that will determine how much this ends up costing Japanese carmakers.
Mary Ann Keller: It’s not just that they’re closed and not generating profits right now. It’s the fact that when they do come back, they can’t possibly come back at anything that resembles full production.
Goldman Sachs calculates the shutdowns will cost Toyota about $73 million a day in lost profits. So if the plants end up being shut for nine days, that would mean a loss of more than $600 million. That’s more than a quarter of its profit last year. But other analysts believe they could recoup some of that later with extra shifts.
Toyota’s suspended overtime shifts at its plants in North America, to make sure it doesn’t run out of parts that are imported from Japan. And a Honda plant in Mexico reportedly may furlough half its workforce because of supply disruptions.
Dave Whiston is an analyst at Morningstar.
Dave Whiston: If you’re producing outside of Japan, you have a lot less exposure to supplier parts disruptions from Japan, but you’re not immune because there’s still a certain small number of parts that are coming from Japan to Toyota, Honda, Nissan factories in the U.S.
Toyota says it’s planning to restart production of some of those auto parts Monday. But there are still thousands more that come from other companies. And they may have to rebuild that supply chain.
I’m Alisa Roth for Marketplace.
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