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CRSReportforCongressPreparedforMembersandCommitteesofCongressTheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiBillCanisSpecialistinIndustrialOrganizationandBusinessMay23,2011CongressionalResearchService7-5700www.
crs.
govR41831TheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiCongressionalResearchServiceSummaryTheMarch2011GreatTohokuEarthquakeandTsunamidevastatedthenortheastcoastofJapanwiththemostpowerfulnaturaldisasterinJapan'smodernhistory.
CompoundingthechallengeforJapanesegovernment,businesses,andcommunitieswastheresultingdestructionofseveralnuclearreactorsintheregionwhichsuppliedelectricityforhomesandindustry.
Notonlywaselectricityunavailable,butalargeareawastemporarilyevacuated,makingrapidreopeningofaffectedindustriesimpossible.
Locatedinthedisasterregionandadverselyaffectedbytheseforcesareanumberofmanufacturingfacilitieswhichareintegraltotheglobalmotorvehiclesupplychain.
Theyincludeplantsthatassembleautomobilesandmanysupplierswhichbuildpartsandcomponentsforvehicles.
SomeoftheJapanesefactoriesthatwereforcedtocloseprovidepartsandchemicalsnoteasilyavailableelsewhere.
Thisisparticularlytrueofautomotiveelectronics,amajorproducerofwhichwaslocatednearthecenterofthedestruction.
TheeffectofthesedisastershasbeenfirstandforemostbornebyJapaneseautomakers,whichclosedmanyoftheirJapaneseassemblyplantsforseveralweeksastheyassessedtheirsupplychainissuesandimpactontheirTier1,2,and3suppliers.
Japanesemotorvehicleplantsinotherpartsoftheworldhavealsobeenaffected,includingfacilitiesownedbyToyota,Nissan,Honda,andothermanufacturersintheMidwestandSouthoftheUnitedStates.
Detroit3automakers,bycontrast,arelessaffected,althoughthey,too,havetakenextraordinarystepstokeepproductionmoving,includingvisitingsuppliersinJapantohelpthemrebuild,locatingalternativesourcesforsomepartsandchemicals,andshiftingplants'summervacationstoaccommodatethelossofparts.
IHSGlobalInsight,aglobalconsultingfirm,forecaststhatover4millionunitsofvehicleproductionwillbelostbecauseofthedisastersinJapan,with90%ofthemfromJapaneseautomakers.
ItispossiblethatashortageofsomepopularJapanesevehiclesmaydevelopoverthesummerintheUnitedStates.
TheDetroit3andSouthKoreanautomakersmaybeabletofillaportionofwhateverdemandJapaneseproducersareunabletomeet.
Congresshasshownaninterestintheeconomiceffectsofthesedisasters,andatleastonehearinghasbeenplannedtoexaminetheeffects.
NotonlyisJapanoneoftheUnitedStates'largesttradingpartners,butitisalsoanallyinAsia,anditsrebuildingisanimportantstepinglobaleconomicrecovery.
Inaddition,Congressmaybeinterestedinevaluatingtheresilienceofglobalsupplychainsasaresultofnewinformationaboutthevulnerabilitiesofsupplychainsintheautomotivesector.
TheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiCongressionalResearchServiceContentsIntroduction1OverviewoftheMotorVehicleIndustry.
1TheU.
S.
MotorVehicleSupplyChain.
2HighTechnologyComponentsChangeManufacturingDynamics.
5EventsinJapanAffectU.
S.
MotorVehicleManufacturingandRetailing.
7ImpactonthePartsSuppliers7ImpactonAutomakers9WhatIstheNear-TermImpactintheUnitedStates14Conclusion.
15FiguresFigure1.
GeographyofNorthAmericanAutoProduction.
3TablesTable1.
TheAutoIndustryBeginsRecovery.
2Table2.
EffectofJapanDisasteronWorldVehicleProduction10ContactsAuthorContactInformation16TheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiCongressionalResearchService1IntroductionTheMarch2011GreatTohokuEarthquakeandTsunamistruckthenortheastcoastofJapan.
ThesenaturaldisasterswereexacerbatedbyadditionaldisruptionsfromthecollateraldamagetoaseasidenuclearreactorthatgeneratedelectricityforresidentialandcommercialuseinthatpartofJapan.
ConcernoverleakingradiationcausedthegovernmentofJapantoevacuatepopulationsfromthevicinityofthedamagedreactorsandtoclosehighwaysconnectingmanufacturingandotheremploymentcenters.
Thedamagetonuclearfacilitiesalsoresultedinashortageofelectricityinpartsofthecountry.
Subsequenttremorsandaftershockscontinuedtoaffectprecision-orientedmanufacturing,whichautomaticallyshutdownoperationswhencertainmoderate-levelaftershockstakeplace.
Someports,whichshipproductglobally,wereaffectedaswell.
Thesedisastershavethrownintoboldreliefthevagariesandfragilityofsomeelementsoftheglobalautosupplychain.
Atypicalmotorvehiclehasover15,000parts,andthelackofanessentialcomponentmayhaltthecompletionofvehiclesandcauseaslowdownorstoppageofassemblylines.
Japanisthesecond-largestvehicle-producingnation(afterChina),andmanyoftheworld'svehiclesandvehiclepartsoriginatethere.
1Itisalsowheremanyautomotivetechnologiesoriginate,givingJapanesesuppliers"substantialandgrowingsharesoftheglobalmarket.
"2Arelativehandfulofcriticalsuppliers,especiallyofelectroniccomponents,wereunabletomeettheircommitments.
Insomeinstances,theautomakersthatdependedonthemhadfewalternativesourcesofimportantinputs.
Fullrestorationofsupplycapacitywilltakemonths.
Notlongaftertheearthquakeandtsunami,anindustryanalystnotedthat"[g]iventhedisruptionsinJapaneseindustrialactivity,theimpactonglobalsupplychainscouldalsobesignificant.
Thisisespeciallyimportantinindustriessuchasautos,telecommunicationsandconsumerelectronics.
"3Inthemeantime,itislikelythatanumberofU.
S.
autoproductionfacilitieswillseeaslowdownofproductionthroughoutthespringandsummer.
CommunitiesintheMidwestandSouthwhichhavebeenreturningtonormalaftertherecentrecessionmayseeapartsshortage-induceddropinproductionthatmayaffectemploymentandpaychecks.
OverviewoftheMotorVehicleIndustryThemotorvehicleindustryisamajorpartoftheU.
S.
economy,accountingin2010forover674,000jobs,or5.
8%ofallU.
S.
manufacturingemployment.
4AlthoughsomeAmerican1In2010,Japanproduced9.
6millioncars,lighttrucks,andcommercialvehicles;Chinaproduced18.
3millionsuchvehicles;andtheUnitedStates,asthethirdlargest,produced7.
7million.
Datafromstatisticssection,InternationalOrganizationofMotorVehicleManufacturers(OICA),http://oica.
net/category/production-statistics/.
2Forexample,over60%oflightvehiclesinJapanareequippedwithnavigationsystems,comparedwith15%inwesternEurope.
"JapanisStillaLeaderinAutomotiveElectronics,"IMSresearchpressrelease,August27,2010.
3IHSGlobalInsight,"JapaneseEarthquake,TsunamiandNuclearDisaster,"WorldCarIndustryForecastReport,March2011,p.
10.
4TotalemploymentinU.
S.
partsandassemblymanufacturingwas674,000in2010;62%ofthisemployment,or415,000jobs,wasinpartsmanufacturing.
U.
S.
DepartmentofLabor,BureauofLaborStatistics,CurrentEmploymentStatisticsSurvey.
TheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiCongressionalResearchService2manufacturersareaddingproductionabroad,generatingconcerninCongressandinmanystatesaboutthefutureofautomanufacturingintheUnitedStates,severalautomakersareopeningnewU.
S.
plants.
In2011,ToyotaandVolkswagen(VW)haveopenednewplantsinMississippiandTennessee,respectively,andNissanisbuildinganewplanttoopeninTennesseein2012.
Fewconsumerproductsareascomplexasautomobiles:the15,000ormoreparts5ineachvehicleareintegratedatthetimeofassemblyintodurablevehicles,mostofwhichwilllastmorethanadecade.
Vehiclesareamongthemostgloballysourcedproductsaconsumercanbuy.
AutosproducedinU.
S.
plants—whetherownedbyU.
S.
orforeignautomakers—containpartsfromnotonlynearbyCanadaandMexico,butalsofrompartsmanufacturersinEuropeandAsia.
Partsarepurchasedfromfarawaybecausethesupplierbasehasdevelopednichemarketsinsomecountries.
Forexample,someelectronicpartsusedinU.
S.
-madeautomobilesaremanufacturedprimarilyinJapan.
Sincetherecessionof2009,whenU.
S.
autosalesandproductionfelltothelowestpointsinthreedecades,automakershaveseenarecovery,asshowninTable1.
6Forecastsfor2011indicatethatNorthAmericanproductionandU.
S.
salesmayeachhitabout13millionunits,alevelnotseensince2008.
Table1.
TheAutoIndustryBeginsRecoveryAutomobilesandlighttrucks,inmillionsofunitsYearNorthAmericanProductionU.
S.
Sales200715.
516.
2200812.
913.
220098.
610.
4201011.
911.
6Source:AutomotiveNews.
TheU.
S.
MotorVehicleSupplyChainThesupplychainisthenetworkandrelatedprocesseswhichtransformrawmaterialsanddisparatepartsintoafinishedvehicle.
Thesupplychainalsoincludesfinancing,advertising,management,anddistributiontothefinalcustomer.
Hundredsoffirmsareengagedinmotorvehiclepartsproduction,finalassembly,andsales.
5ThomasKlierandJamesRubenstein,WhoReallyMadeYourCar,W.
E.
UpjohnInstituteforEmploymentResearch,Kalamazoo,MI,2008,p.
1.
6IHSGlobalInsight,ForecastandAnalysis,March30,2011.
TheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiCongressionalResearchService3ThegeographyofNorthAmericanautomakingisshowninFigure1.
AssemblyplantsarelocatedprimarilyalonganaxisstretchingsouthwestfromOntariotocentralMexico.
Thousandsofpartssuppliers(e.
g.
,Lear,AmericanAxle,BorgWarner)servethefinalassemblers(e.
g.
,GeneralMotors,Honda).
UndertheNorthAmericanFreeTradeAgreement,partsandfinishedvehiclesflowfreelyamongCanada,Mexico,andtheUnitedStates,withouttariffsorotherrestrictions.
InFigure1,thepartssuppliersareshownbycirculardotsandtheautoassemblerswithstars,includingthetwonewestautomakingplants:Toyota'sBlueSprings,MS,facilityandVW'splantinChattanooga,TN.
EuropeanandAsianautomakersgenerallyprefertoinvestinlower-cost,right-to-workstatesintheSouth,andhaveprimarilylocatedtheirplantsthereduringthepast25years.
Figure1.
GeographyofNorthAmericanAutoProductionAutoAssemblyandPartsManufacturingFacilitiesSource:ThomasKlier,SeniorEconomist,FederalReserveBankofChicago,April2011.
Notes:Autoassemblyplantsshownaremajorfacilities,thatis,thosewithproductionofatleast100,000vehiclesperyear.
SupplyChainNomenclatureThemotorvehiclesupplychainiscomposedoflayersofmanufacturerswhomakeproductsfordeliverytoautomakers,orOriginalEquipmentManufacturers(OEMs),whomanagethefinalassemblyintovehicles.
Tier1suppliersprovideproductdirectlytotheautomakers;theyinturndependonsuppliesfromsmallercompanies,referredtoasTier2and3suppliers.
TheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiCongressionalResearchService4Mostmodernassemblyplantshave"supplierparks"nearby.
AsforeignautomakersestablishedplantsintheSouth,sotoodidmajorsuppliers,broadeningtheautoindustry'simpactonlocaleconomieswellbeyondthetraditionalGreatLakesregion.
7Therearetwomajorreasonsforthecloseproximityofsuppliersandautomakers.
Accordingtoarecentstudy,first,motorvehiclesandtheirmainparts,suchasseats,engines,transmissionsandbodypanels,arelarge,heavyandsometimesfragile,whichincreasetransportationcosts.
Second,theindustry-wideimplementationof"lean"productiontechniquesandincreasingproductandmodulevarietysincethemid-1980shavekeptpartsproductionclosetofinalassembly.
Just-in-Time(JIT)partsdeliveriesthatkeepworkinginventorieslowandrevealdefectsquicklyareanimportantelementofleanproduction.
8JITisastrategyandsystemofinventorymanagement"inwhichrawmaterialsandcomponentsaredeliveredfromthevendororsupplierimmediatelybeforetheyareneededinthemanufacturingprocess,"therebycuttingcostsandreducingwasteintheproductionprocess.
9Notallpartsrequirecloseproximitytotheassemblyoperations,however.
Arecentreport10byresearchersatMIT,Duke,andseveralotheruniversitiesfoundthatintheautomotivesector,asinotherindustries,foreigndirectinvestmentandglobalsourcingofpartshaveincreasedsignificantlysincethe1980sduetofallingtradebarriers.
Theauthorsalsofoundthatsupplierfirmsaretakingonmoresubstantialresponsibilitiesandoperatingglobally.
Ithasbeenestimatedthataboutone-fourthofallautopartsusedintheUnitedStatesareimportedfromAsiaorEurope.
11Thisisparticularlytrueofelectronics,whicharemadeoflight-weightcomponentsandcanbeshippedquicklybyairfreightfromAsia,whilestillmeetingtheneedsofJITassemblyinnormaltimes.
Thelargestnon-U.
S.
autopartssuppliersareinJapan,Canada,andMexico.
12AmongJapan'smajorexportsofmotorvehiclepartstotheUnitedStatesaretires,seatbelts,airbags,bearings,fuelinjectionmodules,exteriorlighting(suchasheadlamps),andsemiconductors.
Itisimportanttonotethattheautomotivesupplychainisnotfullyglobal,asmostvehiclesarebuiltintheregionsinwhichtheywillbesold.
Asaresult,themotorvehiclesupplychaindiffersinimportantwaysfromsupplychainsforothermanufacturedproducts,suchaselectronicsandapparel.
AmongkeydifferencescitedbytheMIT/Dukeresearchers13are:7Formoreinformationonemploymenttrendsintheautosectorandtheimpactofforeigninvestment,seeCRSReportR40746,TheU.
S.
AutomotiveIndustry:NationalandStateTrendsinManufacturingEmployment,byMichaelaD.
PlatzerandGlennonJ.
Harrison.
8TimothySturgeon,OlgaMemedovic,JohnannesVanBiesebroeckandGaryGereffi,"GlobalisationoftheAutomotiveIndustry:MainfeaturesandTrends,"InternationalJournalofTechnologicalLearning,InnovationandDevelopment,Vol.
2,Nos.
1and2,2009,p.
14.
9InvestorWords.
com,http://www.
investorwords.
com/2688/just_in_time.
html.
10TimothySturgeon,OlgaMemedovic,JohnannesVanBiesebroeckandGaryGereffi,"GlobalisationoftheAutomotiveIndustry:MainfeaturesandTrends,"InternationalJournalofTechnologicalLearning,InnovationandDevelopment,Vol.
2,Nos.
1and2,2009.
11DomesticpartsmakersareownedbyU.
S.
,European,JapaneseandSouthKoreancompanies.
KlierandRubenstein,WhoReallyMadeYourCar,p.
301.
12KlierandRubenstein,WhoReallyMadeYourCar,p.
313.
13TimothySturgeon,OlgaMemedovic,JohnannesVanBiesebroeckandGaryGereffi,"GlobalisationoftheAutomotiveIndustry:MainfeaturesandTrends,"InternationalJournalofTechnologicalLearning,InnovationandDevelopment,Vol.
2,Nos.
1and2,2009,pp.
8-9.
TheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiCongressionalResearchService5Assemblyandpartsproductionisregionalandnearmajormarkets.
Whereasagenerationago,thosemarketswereprimarilyinEuropeandtheUnitedStates,economicgrowthinAsiahasnowspawnedsimilarregionalmanufacturingofautosandpartsinJapan,SouthKorea,southeastAsia,andChina.
Otherconsumergoodsindustriesaremorelikelytobegloballyintegrated,notregionallyintegrated,whichallowstheiroperationstobemoreconcentratedgeographicallythanisthecaseamongautomotivesuppliers.
Theconcentrationoftheautoindustryinfewcompaniesinafewcountries(11leadfirmsinthreecountriesofJapan,Germany,andtheUnitedStates)has"bluntedtheeffortstoestablishthesortofindustry-leveltechnicalandbusinessprocessstandardsthatprevailinlessconcentratedindustries.
"Theauthorscontendthatthesmallnumberofverylargecompaniesexertsinfluenceoversmallfirms,leadingtolessstandardizationthatwouldpossiblybenefitthesmallmanufacturers.
Inturn,theabsenceofindustry-widestandardshasledtothewidespreadcustomizationofpartsandvehicles.
Theresearchersnotethat"parts…tendtobespecifictoparticularvehiclemodelsincontrasttomemorychipsandmicroprocessorsintheelectronicsindustryandfabricandthreadintheapparelindustry.
.
.
.
Suppliersareoftenthesolesourceforspecificparts.
"Theseuniqueelementsoftheautosupplychainhaveimplicationsforfinalautoassemblywhentherearepartsdisruptions.
HighTechnologyComponentsChangeManufacturingDynamicsAftertherecentearthquake/tsunamiandensuingnucleareventsinJapan,theautopartssupplychain,especiallywithregardtocertainelectronics,hasbeendisrupted.
Understandingthegrowingroleofsuchelectronicsinvehiclesprovidesabasisforappreciatingthechallengeformotorvehiclemanufacturers.
Formostofitshundred-yearexistence,theinternalcombustionautomobilehasrunontheprinciplesofmechanics,whichhaveonlyrecentlybeensupplementedwithawidearrayofmechanismsthatuseelectronicsignalstooperatecertainpartsofthecar.
Forexample,acarkeythatoperatesmechanicallyturnstumblersinthelock,whichopensthedoor,anditperformsasimilarmechanicalfunctionintheignition.
Withmostoftoday'scarkeys,however,thereisbothamechanicalandanelectronicconnection:asemiconductorintheplastickeymoldingsendsasignaltothecar'scomputer,enablingthekeytoopenthedoormechanicallyandthensimilarlytostarttheignition.
Akeywithoutthatchipwouldbeunabletoprovidethosefunctions,evenifithadthecorrectgroovesinthekeyblade.
Thecomputersthatcontrolthekeyandignitionaccess—andhundredsofotherfunctionsinacar—arecalledmicrocontrollers.
1414Amicrocontrollerisacomputerthatisembeddedinanotherproducttocontroltheactionsofthatproduct.
Theyarededicatedtoonetaskandrunjustoneprogram.
MarshallBrain,"HowMicrocontrollersWork,"HowStuffWorks,http://electronics.
howstuffworks.
com/microcontroller1.
htm.
TheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiCongressionalResearchService6Electronicshavebeenagrowingelementinautodesignandmanufacturingsincetheearly1970s,whenthefirstOPECoilpricehikeencouragedautomakerstobeginthinkingaboutnewtechnologyapplications.
Electronicignitionwasoneofthefirstmajorinnovations.
15Inadditiontoaidingfueleconomyandcontrollingemissionsmoreeffectively,electronicshavealsoprovidedgreatervehiclesafetyandmanyfeaturesoncethoughtinconceivableinamotorvehicle.
Ithasbeenestimatedthatelectronicscomprisedabout19%ofvehiclecostin2004,andthattheymayriseto40%by2015.
16Computingcapacityhasalsogrown:accordingtoanengineeratMotorola,injustthreegenerations,microcontrollershavebecome100timesmorepowerful,andthenumberoftransistorsonthechiphasgrown300times.
17Allvehiclesmanufacturedandsoldindevelopedcountrieshaveatleastsomelevelofcomputerization,evenlow-endmodels,whichovertimeinheritelectronicsystemsinitiallyintroducedintoluxuryvehicles.
Manycriticalautomotiveapplicationsarenowintertwinedwithelectronics.
Forexample:Electronicfuelinjectionreplacedthecarburetor,whichmixedfuelandairpriortocombustion.
Electronicfuelinjectionusesanentirelydifferenttechnologythatforcesthefuelunderhighpressurethroughsmallnozzles.
Amicrocontrollerapportionsjusttherightamountoffuelneededbytheengine.
Airbags,whicharenowstandardtechnologyonallcarssoldintheUnitedStates,areenabledbyelectronicsensorsthatmeasuretheamountofsuddendecelerationandinflatetheaircushion.
Themicrocontroller'sjobhasgrownmorecomplexasairbagshavebeenaddedthroughoutthevehicle,makingdecelerationcalculationssubjecttomorevariables.
Antilockbrakingsystem(ABS)preventswheelsfromlockingup(inaskidonice,forexample).
CarsequippedwithABShaveadualbrakingsystem,includingnotonlythetraditionalhydraulicbrakesystembutalsofrontandrearbrakesensorsandanelectroniccontrolunit.
All-wheeldrive(AWD)hasbeenavailableonvehiclesfordecades,movingpowerfromtheenginetoallfourwheelsandnotjusttwo,butcurrentiterationsofAWDharnesselectronicsfortractioncontrolandtoshiftcontrolbetweenthefrontandrearaxles.
Globalpositioningsystems(GPS)areelectronicnavigationtoolsthatprovidedriverswithdrivingdirectionstotheirdestinations.
GPScanalsotransmitviasatellitethelocationofavehicleandtrackthedirectionitismovinganditsspeed,whichcanhelplocatethevehicleifstolen.
15The1958ChryslerDeSotowasapparentlythefirstvehicletouseelectronics(itwasinafuelinjectionsystemapplication)butitwasanexpensivealternativetothecarburetorandfewcustomerschosethatoption.
Agoodexampleoftheaggregativenatureofinnovation,itwasbuiltbyBendixAviationinitsplantinElmira,NY,andwasanadaptationofasimilarsystemusedinKoreanWaraircraft.
GeorgeMattar,HemmingsClassicCar,2005,http://www.
allpar.
com/cars/desoto/electrojector.
html.
16"CarInnovation2015:AComprehensiveStudyonInnovationintheAutomotiveIndustry,"OliverWymanAutomotive,http://www.
oliverwyman.
com/ow/pdf_files/CarInnovation2015_engl.
pdf.
17RossBannatyne,"MicrocontrollersfortheAutomobile,"MicroControlJournal,2011,p.
3,http://www.
mcjournal.
com/articles/arc105/arc105.
htm.
TheMotorVehicleSupplyChain:EffectsoftheJapaneseEarthquakeandTsunamiCongressionalResearchService7Computerdiagnosticsareusedtomonitorsystemsthroughoutthevehicleandassistmechanicsindiagnosingproblemswithinthecar.
Microcontrollerscheckfluids,monitortirepressureandtemperaturelevelsinvariousenginecomponents,andcommunicateirregularitiestothemotorist.
Thesecomputerdiagnosticsremovesomeoftheguessworkinvehiclemaintenanceandrepair.
Hybridvehiclesemployelectronicstomanagetheswitchbetweentheinternalcombustionengineandtheelectricmotor.
Inall-electricvehicles,electronicsmanagethethermalcontrolsthatregulatethelithium-ionbatteries'temperaturesandcommunicatespeed,batterydischargerates,andotherinformationthroughoutthevehicle.
Insomeinstances,theprimaryelectroniccontrolsystemisbackedupwitharedundantpowersystemforsafetyreasons.
Forexample,ifacar'selectricalsystemmalfunctions,thereisaspecialcapacitorwhichkicksintoprovidetheelectroniccontrolswiththeenergyneededtoinflatetheairbags.
EventsinJapanAffectU.
S.
MotorVehicleManufacturingandRetailingTheJapandisastershaveaffectedprojectionsofNorthAmericanproductionandsales,withanalystsforecastingthatsecondquarterU.
S.
productionwillfallby350,000-400,000units.
Smallandmid-sizedcarsmaybeespeciallyinshortsupply.
18ImpactonthePartsSuppliersAnumberofautomotiveproductshavebeenaffectedbytheJapandisasters,especiallycertainmicroprocessorsandauniquepaintpigment,whichareproducedmainlyintheearthquake-strickenregion.
Theensuingshortageshaveaffectedallmajorautomakerstovaryingdegrees.
Specialtypaints.
XirallicpigmentswereamongthefirstautomotiveinputstobeaffectedbytheJapandisastersbecausetheonlyplantintheworldthatmakesthem,ownedbyMerckChemicalsInternationalofGermany,isneartheFukushimanuclearreactor.
Accordingtothemanufacturer,Xirallicpigmentsproduce"astrongerglittereffectthanwithalltheotherpigments.
Lighterbodycolor,greatercolorintensityandamorepowerfullusteraretheadvantages.
"19WhiletheMerckChemicalsplanthasrestartedproduction,accordingtoanewsreport,"theshutdownoftheplantaffectedmanyoftheworld'sautomakers,includingFord,Chrysler,Volkswagen,BMW,ToyotaandGM.
Asaresult,newcarstheworldoverbecameabitlessshinier,dealersandcarmakerslostmarkups.
"20ChryslerannouncedtodealersinAprilthat10paintcolorsforvehiclesweretemporarilyunavailable.
Fordplacedasimilarholdonsomepaint18"AutomakersSlashN.
A.
OutputSchedules,"AutomotiveNews,April25,2011,p.
10.
19MerckChemicalsInternationalwebsite,http://www.
merck-chemicals.
com/pigments/xirallic-/c_xpOb.
s1L_UwAAAEWg8UfVhTn.
20"JapanesePartsParalysis:TheShinyPaintisLeavingtheBuilding,"TheTruthAboutCars,May10,2011,http://www.
thetruthaboutcars.
com/2011/05/japanese-parts-paralysis-the-shiny-paint-is-leaving-the-building/.