Japan automakers are back, a year after disaster

By Yuri Kageyama

Associated Press

Published: Friday, March 9 2012 5:35 a.m. MST

In this May 20, 2011 photo, Nissan Motor Co. Chief Executive Carlos Ghosn speaks to reporters at its Iwaki plant three days after the plant damaged by the March 11 earthquake resumed its operation in Iwaki, Fukushima Prefecture. Nissan is back, one year after the March 11 earthquake and tsunami in northeastern Japan ground auto production to a halt, left giant cracks at a key factory and killed five employees and 17 family members. It's a story of surprising recovery that's playing out at other Japanese automakers, but particularly at Nissan. Ghosn called it "miraculous" Friday, March 9, 2012, ahead of the disaster's anniversary, crediting hard work from plant workers.

Kyodo News) JAPAN OUT, MANDATORY CREDIT, NO LICENSING IN CHINA, HONG KONG, JAPAN, SOUTH KOREA AND FRANCE, Associated Press

Enlarge photo»

TOKYO — Nissan is back, one year after an earthquake and tsunami in northeastern Japan ground auto production to a halt, left giant cracks at a key factory and killed five employees and 17 family members. It's a story of surprising recovery that's playing out at other Japanese automakers, but particularly at Nissan.

Chief Executive Carlos Ghosn called it "miraculous" on Friday ahead of the disaster's anniversary, crediting hard work at his company. The maker of the March subcompact and Infiniti luxury brands had a record sales year of 4.67 million vehicles in 2011. That was up 14 percent from the previous year.

By May, Nissan Motor Co.'s Iwaki plant in Fukushima Prefecture, devastated by the disaster that killed more than 19,000 people, was almost completely restored to full operations.

But it's not all plain sailing for Japan Inc. and its automakers. There are still big risks from perennial problems such as the strong yen, executives and analysts say. Globalization of production can help Japan's automakers minimize the yen challenge but comes with its own potential headaches as shown by last year's flooding in Thailand — a major production base for Japanese car makers.

Toyota Motor Corp. had initially expected to lose production of 2 million vehicles from the March 11 disaster, which damaged key suppliers in northeastern Japan, including Renesas Electronics Corp., a computer-chip maker.

But when all was done, Japan's No. 1 automaker ended up losing production of 370,000 vehicles — 220,000 of them in the first month after the disaster.

Production at Toyota, which makes the popular Camry sedan and Prius hybrid, was back to near-normal levels by September last year.

"The tremendous efforts of our workers on the ground led to a recovery so quick it was outside our imagination," Toyota President Akio Toyoda said last year.

The production woes knocked Toyota from top place in global vehicle sales to No. 4. General Motors Co. regained its crown as the world's No. 1 automaker, which it had relinquished to Toyota in 2008.

The disaster even worked to identify weaknesses in the industry's parts supply chain. The automakers are studying ways to spread out risks among suppliers. Toyota is targeting a plan to get production back to normal in two weeks if another disaster should strike.

Although the Japanese economy is ailing amid towering reconstruction costs and the trillions of yen (billions of dollars) to tackle the crisis at the crippled Fukushima Dai-ichi nuclear plant, the auto industry is one bright spot.

Honda Motor Co. had the toughest problems, hit by the flooding in Thailand late last year, which also disrupted production on top of the disaster in northeastern Japan. Still, Honda's global production is now back at pre-disaster levels, except for Thailand.

The production disruptions reverberated globally.

In North America, Japanese manufacturers slowed their assembly lines or shut down production altogether when they couldn't get parts from Japan. Michael Robinet, the managing director of IHS Automotive Consulting, estimates lost regional production totaled 400,000 vehicles.

Production cuts hurt supplies of some of the most popular North American-made vehicles such as the Camry sedan. Sales of the vehicle plummeted 36 percent last May from the year before. Dealers were frantic to get vehicles such as the Prius hybrid. Last May, U.S. dealers only had about one-sixth of their usual supply of Prius cars, just as high gas prices were sparking demand for fuel-efficient cars.

When they couldn't find Japanese cars, buyers went elsewhere. South Korea's Hyundai Motor Co. and U.S. automaker Ford Motor Co. were among those who gained sales.

Get The Deseret News Everywhere

Subscribe

Mobile

RSS