Thursday, November 3, 2011

Thailand Flooding Halts Honda and Toyota Production

As we spoke for the last week about how the earthquake and tsunami in Japan halted supply chains around the world, I wondered about the current flooding in Thailand. With flood levels so high, I figured supply chains had to be effected.

I searched for recent news articles on the topic, and I was really excited to find an article by, a website for news related to the trucking industry. While I never even thought of a news site for truckers before, it makes total sense that they would be completely in-the-know about any supply chain breakdowns.

The article detailed how car manufacturers are getting hit hard by the flooding. The floods destroyed many plants and facilities in Thailand devoted to making car parts. These parts are then sent to the United States where they are assembled into Hondas and Toyotas.

Both Honda and Toyota have announced that they will be cancelling overtime indefinitely to conserve parts and money. In addition, Honda will halve production from now until November 10th and halt production completely for one day on November 11th.

I have to wonder how robust these automobile supply chains are. While the intensity of Thailand’s current flooding is uncommon, seasonal flash flooding is very common. If even some level of flooding happens on an almost yearly basis, I would think that automobile manufacturers would find back-up providers of these necessary automobile parts. Maybe this will be the wake up call automobile manufacturers need to reexamine their supply chains.

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