U.S. auto plants will face sporadic shutdowns thanks to the Japanese earthquake, which will disrupt supply of microchips and other key electronics that were already in short supply before the natural disaster, experts and industry officials say.
"You are going to see a somewhat higher rate of plant shutdowns, but I don't think it's going to be widespread," Craig Fitzgerald, an automotive-supplier analyst with accounting-and-consulting firm Plante & Moran, tells The Wall Street Journal. "It's going to be sporadic and moving around."
|Quake may shut some plants.
Any plant shutdowns and supply shortages won't seriously disrupt overall production volumes, although they could hurt profit margins for auto makers and suppliers, Fitzgerald adds.
Even before the earthquake, suppliers to the automobile industry had been suffering amid the overall economic downturn, with many closing up shop or cutting production due to decreased demand.
U.S. auto giant Ford has been dealing with pinches in its supply base for months, says company spokesman Todd Nissen.
A shortage of engine parts led to two temporary plant shutdowns since December on its Ford F-150 pickup.
"We did have some downtime here and there," Nissen tells the Journal.
"This natural disaster in Japan doesn't help those pinch points."
The Japanese government says the economic toll that the earthquake and ensuing tsunamis inflicted on the country could top $300 billion, the Associated Press reports.
That estimate surpasses one made by investment bank Goldman Sachs, which predicts $200 billion in damage while The World Bank estimates $235 billion.
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