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Manufacturers must lead Japan’s recovery

March 30, 2011 - 18:46 By 최남현
Many automobile and electric appliance makers have been forced to suspend output as their production centers were crippled by the March 11 earthquake and tsunami that hit the Pacific coast of the Tohoku and Kanto regions.

The road to full recovery from the disaster will be bumpy, but the manufacturing industry must play the role of a locomotive to drive the national economy. Manufacturers are urged to make all-out efforts to repair damaged factories so production can be resumed as soon as possible.

The makers that were forced to halt production cover a gamut of industries. This is because their production centers and parts suppliers were concentrated in the Tohoku and Kanto regions.

A case in point is the auto industry. Toyota Motor Corp. entirely halted domestic production after the disaster due to the difficulty in procuring parts from suppliers. Toyota was to resume production at two plants Monday, but its production pace will remain far short of full capacity.

Honda Motor Co., on the other hand, will extend the suspension of its domestic four-wheel vehicle production plants until early April. Thus, domestic carmakers cannot ascertain when they will be able to resume full-scale production.

About 30,000 parts are used to make a car. Many precision parts are so specialized that they have no substitutes. If the supply of such parts is suspended, car production will grind to a halt.

Thus, an unexpected weakness has been revealed in the efficiency-oriented just-in-time production system introduced by Japanese carmakers to reduce excessive in-process inventories.

The situation is the same with electric appliance makers. Sony Corp., for example, has suspended the output of its LCD televisions and other products due to the disruption of its parts supply.

Some other makers cannot resume production because their factories are located in the area surrounding Tokyo Electric Power Co.’s Fukushima No. 1 nuclear power plant, which was crippled by the disaster.

The interruption of Japanese makers’ production also affects foreign firms. General Motors Co. halted production temporarily due to the disruption of its parts supply from Japan. Local firms in Thailand and other Asian countries have been forced to reduce production for the same reason.

If such a situation drags on for a long time, it will have an adverse effect on the recovery of Japan’s economy. It is also feared that foreign firms may switch from Japan to other countries as their parts supply source. This would deal a blow to Japan’s growth strategy aimed at expanding exports.

As a way to overcome the hardship, some major companies have teamed up to provide relief assistance to their common parts suppliers. This is an appropriate step toward securing a steady supply of essential basic parts that are necessary to resume production.

It is also indispensable for individual firms to come up with such ideas as procuring substitute parts or utilizing plants in western Japan.

Meanwhile, the government should accelerate repair work on roads to restore transport routes to the devastated areas. Another urgent task is to expand financial assistance to cash-strapped small and midsize firms.

TEPCO, for its part, should take due care not to cause confusion at factories in carrying out its planned power outages.

(The Yomiuri Shimbun, March 28)