INDUSTRY RETHINK
The disruption to Japan's auto industry has had a ripple effect across overseas production and non-Japanese automakers are expected to take a hit as inventories of parts dry up in the months ahead.
The global car industry could now rethink how it sets up its supply chain, a top industry economist said.
"We may have shared parts across too many models. We may have built regional models with global parts, which means lines will go down here for cars that don't sell anywhere else, really," said Sean McAlinden, chief economist for the Center for Automotive Research, at a conference in Dearborn, Michigan. "And maybe there will be some pull-back because of this particular disaster. Who knows?" General Motors Co, Ford Motor Co, Toyota, Honda, Nissan and other automakers have all idled plants or scheduled downtime at facilities because of the parts shortages. McAlinden said the next effect of the parts shortages will be seen soon in North American ports. "Remember, there are 30,000 parts to build a car. We might see an impact on practically every production line in North America and most of Europe because of this supply interrupt, this black swan for the global auto industry in Japan." Black swan is a term coined by best-selling author Nassim Nicholas Taleb to describe a surprise event that has a major impact.