Toyota (NYSE TM) will restart most of its Japanese plants on April 18. They may not operate at full capacity and may close for an upcoming national holiday. The news is a testament to Toyota’s ingenuity and ability to make what would appear unworkable work. Many other Japanese companies do not have dates or even goals for re-opening. It is easy to say that Toyota plants are not in the area most badly hurt by the quake which gives it some advantage. On the other hand it is also notable that much of what the entire nation faces is the equivalent of rationed energy.
Toyota’s financial incentives to restart the plants are clear. It has already warned that supplies in the US will be tight. With the American market surging again and Toyota coming off sales challenges because of recalls just over a year ago, it cannot afford another misstep. Ford (NYSE: F) and GM (NYSE: GM) may not say so in public, but Toyota’s trouble is just the sort of thing that they need to add market share.
The logistics of restarting the plant must be considerable. They operate with parts shipped from across the nation and some from overseas. Workers may have been dislocated, and certainly some of their relatives are. The ability to get consistent power supplies to plants also has to be a challenge.
Some of Japan’s large companies may have fallen on hard times recently. That is certainly true of Toyota and Sony. The earthquake could have been such a wound to their manufacturing abilities that the sales damage would have been irreparable. People at Toyota’s production facilities made sure that the company had a chance for a swift recovery, and it worked.
Douglas A. McIntyre
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