@Risk

Friday’s devastating earthquake and tsunami will have broad economic implications.

For instance, The Detroit News is reporting that Japan’s leading automakers are suspending production at their domestic plants on Monday as they assess the condition of their factories and parts suppliers.

Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co.have suffered damage at more than a dozen plants and facilities.

Toyota says that it is now conducting a detailed survey of each plant to determine the extent of any damage. The company is also assessing the situation at our suppliers, dealers and the impact on North American import vehicles.

Updates from Nissan are available here.

We’re likely to see shutdowns in the high tech and semiconductor manufacturing industry –and others –as well. (more…)

Over the past year, Toyota has agreed to pay $48.8 million –or the equivalent of about $30 per Toyota vehicle sold in the US in 2010 –in fines related to multiple product recalls.

The two latest penalties, announced earlier this month, amount to $32.425 million –$16.375 million in one case and $16.050 million in the other –in response to the US Department of Transportation’s assertion that Toyota failed to comply with the requirements of the National Traffic and Motor Vehicle Safety Act for reporting safety defects to the National Highway Traffic Safety Administration (NHTSA).
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The recession hit auto suppliers hard, and even though some are now reporting significant fourth quarter gains, others are not out of the woods yet.

After all, some auto manufacturers are still restructuring. Volvo Cars, for instance, is reviewing its supplier base, looking for places where it can reduce costs and simplify manufacturing processes.  Ultimately, the company may cut as many as one-third of its suppliers, Volvo’s purchasing chief told Bloomberg last week.

Volvo hasn’t shown a profit since 2005. But, its new owner –the Zhejiang Geely Holding  Group Co. from China –what’s to turn things around, and improving supply chain efficiencies and alignment has become a top priority.  All told, the company has about 450 suppliers, and of these, the 20 largest supply about 70 percent of Volvo’s parts. This short list includes seatbelt and air-bag maker Autoliv Inc., seat manufacturer Johnson Controls Inc., and Robert Bosch GmbH.

Bloomberg reports that Volvo may trim its suppliers down to 300. (more…)

Last week, BMW Group opened a new 1.2 million square feet manufacturing facility in Spartanburg, South Carolina.

The Plant Spartanburg expansion cost upwards of $750 million and will allow the company to beef up production of the new BMW X3. The facility improvements included construction of a new assembly hall for the X3 and expansion of the Body and Paint Shops for higher production capacities. As a result of these upgrades, BMW expects Spartanburg’s production capacity to increase by 50 percent from 160,000 to 240,000 units by 2011.

The company says 1,600 new employees will be needed to support the increased production. About 1,000 have already been hired, and the remainder will be hired by the end of the year. These new hires will increase the total number of jobs at the plant to 7,600. (more…)

General Motors is abandoning its traditional summer-shut down in order to keep up with buyer demand.

Typically, GM plants in the U.S. shut down for two weeks in late June-early July. But, last week the company announced that this year, most of its domestic plants will forego the traditional shut-down to help meet increasing demand from buyers.

The decision is expected to generate up to 56,000 additional vehicles. (more…)