Friday, October 28, 2011

REUTERS: Thai floods batter global electronics, auto supply chains


Floods affect auto production from Thailand to N.America


* Deep supply chain links cut costs, but breaks prove expensive

BANGKOK/TOKYO, Oct 28 (Reuters) - Manufacturers of car parts are worst hit in Thailand and face a bleak key holiday selling season due to massive floods, which have shut down production.

Japanese car makers that had just started to recover from the March earthquake and tsunami that disrupted their supply chains are now facing shortages of key parts made in Thailand, a key manufacturing base in Southeast Asia.

Companies including Toyota Motor Co and Honda Motor Co have already curtailed production at plants as far away as North America because their Thai suppliers are under water.


CARS AND SANDBAGS

Toyota Motor officials in Thailand said the company had shifted ready-made parts used to produce pick-up trucks and modified pick-up trucks to its Gateway City facility in Thailand's Chachoengsao province.

The facility there is 44 meters above sea level, said Vudhigorn Suriyachantananont, senior vice president of Toyota Motor Thailand.

Wall of sandbags are protecting the plant and "tools and machinery are sealed and stored in high places," he said.

Daihatsu Motor Co said on Friday it would reduce work to produce Toyota-badged cars at two Japanese factories next week due to a shortage of parts from Thailand.

Daihatsu, the minivehicle unit of Toyota, said it expects no impact from the Thai floods on its own minicar production in Japan and in Indonesia and Malaysia at least for November.

The Japanese government announced on Friday it would allow Japanese companies operating in Thailand to bring some Thai workers to Japan to make up for lost production.

Japan's trade ministry said the Thai workers would only be allowed in for six months and would not be allowed to bring their families.