Japan’s chicken-or-egg dilemma

TOKYO -- After the quake, Japan’s auto industry faces a vexing chicken-or-egg question.

Are carmakers not producing cars because they can’t get parts? Or are parts makers not supplying parts because they’re getting no orders?

As might be expected, given the supply-chain chaos after Japan’s massive March 11 earthquake, the answer depends on whom you ask.

Most Tier 1 suppliers here say they are ready to go -- if only their automaking customers would fire up their factories and start placing orders again.

But automakers say plants are down because the parts are, too.

The dilemma highlights the balancing act Japan’s auto industry faces in recovering from three weeks of paralysis. All it takes is one missing part to topple the whole supply chain.

And in Japan right now, which part is missing can vary day by day -- especially with widespread and unpredictable power outages wreaking havoc with manufacturers.

Parts makers who are up one day can easily be down the next.

If Supplier A can’t ship on Monday, its automaker-customer cancels production, affecting Suppliers B through Z. On Tuesday, maybe it’s Supplier F that can’t ship.

The key to resurrecting the industry will be orchestrating a coordinated reboot of assemblers and suppliers at the same time. Because, as this crisis shows, you can’t have one without the other.

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