Toyota May Halt Production Due to Steel Shortage, Plant Explosion

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Photo: Hessam Bakhtiarzadeh

Toyota Motor Corp. said on Saturday it may halt production at its domestic plants early next month due to a steel shortage, following an explosion at a steel plant operated by one of its affiliates.

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The blast at an Aichi Steel plant has curbed production of steel parts, which may impact output at the world’s best-selling automaker which produces around 40% of its global output in Japan.

“At the moment, there is enough supply inventory to keep our domestic plants running until Feb. 6,” a Toyota spokesman told Reuters, adding that overtime and weekend shifts for next week had been canceled.

“After that, we will be monitoring our supply situation on a day-by-day basis and decide accordingly.”
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Aichi Steel said that the Jan. 8 explosion at its Chita plant in central Japan dented production of specialty steel parts. It added that it aimed to resume operations in March.

Comments (3)

  1. Lisa Reisman says:

    It seems rather shocking that Toyota could actually face a line shut-down. Their historical policy of tri-sourcing with some 60/20/20 supplier mix should prevent precisely this type of shut-down. Sole-sourcing is an inherently risky strategy for precisely this reason.

    I’d bet that Toyota has another supplier waiting in the wings before a plant shut-down. If not, it sounds like we’ll have another story! LAR

  2. PKB says:

    If Japan would open its markets to more U.S. SBQ suppliers such situations could be mitigated.

  3. Lisa Reisman says:

    Great point!

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