Chrysler avoids stoppages after Japanese earthquake and tsunami

Since the earthquake and ensuing tsunami hit Japan last week followed by a series of aftershocks and repeated nuclear power plant explosions, automakers around the world have been forced to take a good long look at their component inventory and the Chrysler Group has offered their first statement since the natural disaster hit.

Dan Knott, Chrysler’s senior vice president for purchasing stated that their "pipeline is full, but of course it's not being fed at the other end. For the U.S. side, in particular, we won't see the full brunt for four to six weeks. We have nothing on our radar screen right now that indicates we will be significantly impacted. That's not to say I'm not nervous."

The main concern for most American automakers is that pretty much every car sold in the US has something from Japan, and according to Chrysler representative Katie Hepler, between 2 and 5 perfect of the components on their vehicles come from the battered country. This is a fairly low number but Chrysler will be forced to either find another company who can provide those components or they will be forced to deal with production stoppages that have already hit GM’s Shreveport Assembly Plant.

As the major Tier 1 suppliers (those who sell items directly to the automakers) have looked over their facilities since the earthquake and tsunami, there have not been any reports of companies that have sustained any severe damage. This means that that they would, in theory, be able to pick back up with production; supplying auto companies around the world but in many cases, these Tier 1 companies buy components from Tier 2 companies. Tier 2 companies often buy from Tier 3 companies and so on…so until all of these supply companies throughout the “lower” tiers check in with damage reports, the industry won’t have a good idea as to just how bad things could get.

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