The recent earthquake and tsunami have Japan’s motorcycle manufacturers halting production to assess damage.
As the humanitarian scope of the catastrophic earthquake and tsunami in Japan continues to broaden, the economic consequences are also dire. Damage to the nation’s critical automotive industry includes many of the major motorcycle manufacturers.
Most manufacturers have announced extensions of production shutdowns to assess the situation, sometimes even in unaffected regions. Interruptions to parts supply chains and distribution systems, as well as damage to infrastructure and energy shortages, are hindering production plans. Rolling blackouts, transportation delays and gasoline scarcity has created logistical problems in non-production facilities as well. Another concern is export shipments, with damage to some port facilities reported.
UPDATE: Honda announced on March 18 it will extend suspension of production at its Kumamoto Factory until at least March 23 – Honda Production Hold Extends to March 23. After further extending the production delay through March 27, Honda announced production at its motorcycle-building Kumamoto Factory will resume March 28.
Honda has shut down production at six plants, including the motorcycle-producing Kumamoto Factory. The production suspension will extend through March 20, with Honda announcing it will “suspend regular operations at all Honda facilities in the Tochigi area.” The Tochigi Prefecture includes a Honda auto parts factory and R&D facility. Initial reports claimed one employee death with 30 or more injured at these locations.
Honda will contribute 300 million yen toward disaster recovery, as well as donate 1000 generators and 5000 gas containers to its staff. The company also plans to restructure its recruiting activities for prospective hires from the affected quake regions, giving more time for new hires to report for work to assist families.
As a parts facility, the Tochigi factory is crucial to automotive production. While Honda has already shuttered its motorcycle production facilities in America, there is the potential for a slowdown at U.S. automotive facilities if parts production is seriously hindered.
The cascading effect of supply chain problems could wreak havoc on the entire production recovery. Automotive News Asia Editor Hans Greimel reported on March 14th that Honda has 113 suppliers in the affected quake area and had yet to contact 44 of them. Greimel cites a similar supply problem from a smaller earthquake in 2007. Damage then to critical suppliers, including the piston ring manufacturer Riken, were the cause of a production decline of 125,000 units.
Suzuki has suspended production at six plants, including the Takatsuka and Toyokawa facilities. The Takatsuka site produces motorcycle engines, with the Toyokawa plant motorcycle production and assembly. Those sites shut down on March 14, with Suzuki extending the production delay to March 17th, at which point it will assess the situation. A statement on the company’s global site says: “Suzuki has been investigating the situations of our facilities, distributors and dealers.”
Yamaha motorcycle production facilities escaped unscathed, though it notes that sales offices and retail shops in Sendai “sustained some slight damage.” The company also reports some non-motorcycle-related factories will likely be subject to the rolling blackouts. While none of its direct employees have reported injuries, the company has been unable to contact one employee from a Yamaha subsidiary.
As for the long-term effects, Yamaha issued a statement saying: “We are currently investigating the effects of the earthquake on performance. In the event that we find the outlook is for a major impact on business results, we will make an announcement at an early date.”
Tire production at Bridgestone’s Nasu plant is slated to resume March 16. Nasu is the sole producer of motorcycle tires for the Japanese company.
UPDATE 3/17/2011: In a letter to Kawasaki Dealers Kawasaki Motors Corp., USA President Tak Teranishi said of the quake’s effect on KHI:
“The primary disaster area is centered near Sendai, which is 185 miles northeast of Tokyo. Kawasaki’s
Akashi factory is located 400 miles southwest of that location. Fortunately, the Akashi/Kobe area
where KHI offi ces and factory are located did not experience any direct effects from the earthquake.
“The people of Japan will continue to face immediate hardships; the situation there is changing daily.
The companies that operate there, like Kawasaki, will continue to monitor the situation and will be
prepared to adjust business operations as dictated by circumstances.”
Bridgestone reports no serious damage to five of its production facilities in the affected regions. The company retains a number of sites in the Tochigi Prefecture, including the Nasu tire plant. The Nasu facility, which we toured last year, is the sole motorcycle tire production site for Bridgestone worldwide.
A statement from Bridgestone cites no injuries or deaths at the five facilities. Production at these sites was stopped, pending safety evaluations. Bridgestone plans to resume production at these sites “based on electricity restrictions and other issues.”
In his latest communications with Tokyo headquarters, Bridgestone’s Senior Manager of Motorcycle & Kart Products in the U.S., Bob Graham, confirms tire production is scheduled to resume at Nasu March 16 after inspection revealed no damage. No tire shortage is expected in the U.S. as the company typically maintains a three-month supply in its US-based warehouse, with American distributors also maintaining three-month inventories.
Production at other Bridgestone plants resumed after safety evaluations. Notably, one of the major manufacturing products of Bridgestone, are energy-damping isolation bearings. The designs are utilized in Japanese high-rise buildings to dissipate the seismic energy of earthquakes.