Toyota US president worried about supplier chain
March 13, 2009 by Matt Brogan
Toyota’s US president Jim Lentz says he is worried about the future of more than 100 suppliers that make up the brand’s supply chain with immediate and serious concern for almost 30.
Lentz said that not only did this pose a threat to Toyota’s production schedules but that with so many suppliers’ futures in limbo, thousands of manufacturing jobs could be at risk.
Testifying before the Obama administration’s auto industry task force, Lentz said he has serious concerns as to the welfare of some 20 to 30 suppliers.
In all Toyota uses about 500 suppliers in the US, about 60 percent of which make parts for other car manufacturers.
Lentz also voiced concern over a failure of one of the Detroit Three at the meeting saying 45 percent of US Toyota dealers also own a GM franchise.
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This paints an interesting picture of the incestuous nature of the auto world’s inter-twinning web of supplies/manufactures/deakers.
This paints an interesting picture of the nature of the auto world’s inter-twinning web of supplies-manufactures-dealers.
As I said before, if GM fails watch the industry collapse.
I don’t think it will be allowed to happen.
Just goes to show how interwoven the auto industry is.
This just backs up what a lot of us have been saying for a long time. This is the hard part about letting GM & Chrysler LLC collapse. Sure they (seemingly) deserve to but it is the flow on effect caused that would reap havoc throughout the whole industry. I mean a 40>50% downturn creates problems imagine if you took away 50% of their customers as well.
Unfortunately the situation is even more tightly entwined in Australia.
This is one of the reasons why many expect the US government to keep propping up GM and Chrysler. If one of them fail, expect plenty of their suppliers to go down with them. If that happens many of the US plants may be forced into further shut downs because one of these suppliers cant supply them with the components they are contracted to supply. It’s a bit like a house of cards. Pull any one out from anywhere and the whole industry risks collapse.
For companies like Toyota who rely heavily on a strong supply chain to have their very lean JIT manufacturing processes working properly, this would be a concern.
It’s a similar situation here in Australia if Holden close it will have a flow on effect to both Ford and Toyota partiuclarly in terms of the cost of locally sourced parts.
Because there are a number of companies that make similar parts for all 3 of them. However; if one Holden was to leave the suplliers would recover the loss of income that they got from Holden by upping the price of parts to Ford and Toyota which could make one of them look oveseas instead.. forcing the parts suplliers to close resulting in even more uneployment.
Atleast some here will hopefully understand that, the Industry doesnt benefit when a major competitor goes down.
It never does.
Because many smaller companies rely on the big companies to make a living.
Merging companies is a better solution.
Phil Says:
March 15th, 2009 at 11:13 am
“For companies like Toyota who rely heavily on a strong supply chain to have their very lean JIT manufacturing processes working properly, this would be a concern.”
Phil, you are seriously deluded if you think that JIT is a toyota thing that nobody else does. JIT is universal accross all car manufacturers, and I doubt that Toyota invented it either, as I think it came from another industry.