Automakers and Auto Industry and Factories and Toyota and Manufacturing & Technology

Toyota extends North American production cuts

April 19, 2011

Toyota Motor Corp. has extended production cuts at its North American factories into early June as it struggles to deal with parts shortages caused by the earthquake that hit Japan.

The moves announced Tuesday raise the likelihood of widespread model shortages at Toyota dealerships well into the summer buying season. But the company promised no layoffs and said it would be ready when parts start flowing again.

Toyota said in a statement that production will be suspended in North America on Mondays and Fridays from April 26 through June 3. During the same period, plants will run at half capacity on Tuesdays, Wednesdays and Thursdays.

In addition, U.S. production will be suspended the week of May 30 after the Memorial Day holiday. Canadian production will be suspended the week of May 23 in conjunction with Victoria Day. The company's 25,000 workers in North America will report to work and use the time for training to make improvements at Toyota's 13 factories in North America, the company said.

Toyota employs 4,700 workers in Indiana, mostly at its plant in Princeton.

"We are trying to continue production as much as possible and keep our work force intact in order to facilitate a smooth transition back to full production when all parts are available," Steve St. Angelo, executive vice president of Toyota's North American manufacturing, said in a statement.

The world's No. 1 automaker last week announced Monday and Friday suspensions from April 15 to 25. Plans after June 3 will be determined later, the company said.

A March 11 earthquake and tsunami damaged auto parts plants in northeastern Japan, causing the parts shortages that have affected nearly all other automakers.

The North American plants have been using parts in their inventory or relying on those that were shipped before the earthquake.

Toyota gets only about 15 percent of its parts from Japan for cars and trucks built in North America. Those parts include electronic and rubber components, and a paint additive.

Toyota resumed car production at all of its plants in Japan on Monday for the first time since March 11, but said the factories will run at half capacity due to parts shortages.

The company said it was still struggling to secure around 150 types of auto components.

The twin disasters had forced Toyota to shut down all output in Japan except at three plants, which have been running at limited capacity since late March and early April to produce hot-selling Prius, Lexus and Corolla cars.

Shortages of parts from Japan are also affecting other automakers.

Ford Motor Co. and Nissan Motor Co. recently said that several North American plants would be closed for part of this month. Chrysler Group LLC is cutting overtime at plants in Canada and Mexico to conserve parts from Japan.

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