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Subaru, Toyota curb output at Indiana plants

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Two Japanese automakers are scaling back production at North American plants as they assess their ability to get parts from Japan after that country's devastating earthquake and tsunami.

Subaru of America said Tuesday it has suspended overtime at its only North American plant in Lafayette. Toyota Motor Corp. also said it was suspending overtime and Saturday production at its 10 plants in the region. Toyota employs 4,100 at its Indiana plant in Princeton.

So far, other Japanese automakers say their North American plants are unaffected. Nissan Motor Co., Honda Motor Co., Mitsubishi Motors and Mazda Motor Corp. all say they have not changed their production plans.

But that could change if lingering damage from the earthquake prevents parts shipments. Mitsubishi, for example, has enough parts on hand or en route to operate its Illinois assembly plant through April 3, spokesman Dan Irwin said.

"The situation is fluid, so we continue to monitor our supply chain and logistics," he said.

In Japan, auto companies have shut down production for the rest of the week as they assess damage to plants, ports and roads.

While Japanese automakers with North American plants use locally-based suppliers for many of their parts, others still come from Japan. The U.S. imported $12 billion worth of auto parts from Japan in 2010, from spark plugs to engines, according to the Original Equipment Suppliers Association.

Dave Andrea, the trade group's senior vice president of industry analysis and economics, said some parts had been in short supply prior to the earthquake, including semiconductors, precision bearings and tires. He estimated that most automakers have a three- to four-week inventory of parts in the pipeline.

"Once those start to dry out, that's where you see the shortages in the assembly plants," Andrea said.

Companies can ill afford those shortages. Subaru spokesman Michael McHale said the Indiana plant had been running on overtime because of strong sales of its vehicles. The Outback wagon, which is made at the plant, is currently at a 30-day supply. A 60-day supply is considered ideal.

McHale said he didn't know when overtime will be restored at the plant, which produced 150,000 vehicles last year, or 55 percent of the Subarus sold in the U.S. The plant also makes the Tribeca wagon and Legacy sedan.

Toyota, meanwhile, said the restrictions on overtime and Saturday shifts were designed to conserve Japanese-made parts. About 75 percent of the parts in North American-built Toyotas are supplied locally, but the rest come from Japan. All Toyota plants in Japan are closed through at least Wednesday.

Toyota spokesman Mike Goss wouldn't specify which parts are imported, but said the company typically has a two- to three-week supply of them.

Now supplies are uncertain.

"There's some pipeline of parts from Japan to the United States and we're trying not to burn through that too quickly," Goss said.

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  • More hope & Change
    With Do just respect to the people of Japan, This should be a wake up call for the American Companies & the Leadership of America. If the Supply & Demand Chain Executive world does not get the picture of what should be done they are in my view foolish! If The Restraint of In Ports was in place the United States would not be Hurting from the over All event, because the American resource Structure would be alot stronger an less Affected.

    I as well point out the fact About the NFl and the Colts Foot Ball and the Lucas oil Stadium Built for them to play in as they fight over being paid and Strikes, as they the Nfl makes millions a year the Government would seek to force We the people to Pay for the building then Nationalise the Stadium forceing we the people and Smaller American Companies to Pay Two Way One as the Pay taxes for its up as they compete with the over sea's production market of Good the Fan buy to Support a so call All American Team.

    As I uNderstand that was in-part one reason why many indiana Voters in the md Terms Voted for A Cap on States taxes, i am still woundering why the Taxes have Not be repealed, it the Sport teams mean so much Why wouod not they have paid for the Stadium to make it privately owned v/s a Burden of the over uses of nationalism.

    I don't Watch Football I could care less but its plain to see what the worthless leadership is do and this was long before Obama! I will not be voting for Mitch Daniels


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    Bruce Michael Anderson
    Portfolio URL: http://Writing.Com/authors/epistemology

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

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  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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