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The Oil Drum | Fukushima Open Thread - Tue 3/29

Seems the spreading radioactivity is severely disrupting supply chains.
Looming Loss of Billions - Automobile industry is Setting up Contingency Plans (German)

A summary of the most important points:
The global automotive industry is bracing for the impacts of supply disruptions. Could lead to losses of billions. Shipping companies are avoiding the ports of Tokyo and Yokohama which handle 40% of Japan's container freight. Hongkong's OOCL announced on Friday they will reroute their ships to Osaka. If radiation is detected on one of their ships, they will face month of delays due to inspections. A Japanese ship showed radiation in the Chinese port of Xiamen although it had kept at least 120km away from Fukushima at all times.

The infarction for supply chains is just a few days or weeks ahead. The first test will be a ship with 2,500 containers landing in Long Beach, CA on Friday. It's the first that set sails from Japan after the quake. It's arrival is a sign that the automobile factories in North America and Europe only have two weeks before the supply pipeline (from before the quake) is empty.

Japan is a premier source for car (consumer) electronics - 35% of the global market, chips are $7.3b annually. Top management in car companies is fearful since the lack of highly specialized parts from Japan could stop production. 20,000 individual parts are needed for a compact car alone. E.g. Hitachi Automotive produces 60% of the global supply of a part that measures air flow in motors. The factory north of Tokyo is now closed.

Merck produces the glossy pigment Xirallic 40km away from Fukushima. Production has been halted. Consequences: Chrysler has limited its retailers to ten colors. Ford eliminated some black and red tones.

Mayhem is brewing in the auto parts pipeline from Japan to the rest of the world. 40 suppliers of the three largest Japanese car companies have halted production due to quake damage, rolling blackouts, or radiation danger. Japan produces 13% of the world's cars. Toyota has closed 11 factories, Honda has 110 suppliers in the quake area, ten of them can't say when they will restart production.

According to iSuppli, if the affected suppliers can't restart production within six weeks then a third of production could be cut in the worst case. "It would be very difficult for every big manufacturer to escape this disaster." says Michael Robinet of IHS. IHS has marked the calender at the beginning of the third week in April. It could be the start of serious production delays.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Tue Mar 29th, 2011 at 12:02:03 PM EST

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