Denso Corp., Japan's biggest parts supplier, was among the first players in the country's auto sector to preview the financial pain unleashed by the COVID-19 pandemic.
In announcing its full fiscal year earnings at the end of April, Denso said net income tumbled 73 percent and operating profit plunged 81 percent. Revenues slid 3.9 percent.
The coronavirus outbreak took a big bite out of profits, and Denso said prospects for recovery are so murky it couldn't issue an outlook for the fiscal year ending March 31, 2021.
Denso's business has plunged as its top customer, Toyota Motor Corp., implemented sweeping production suspensions overseas and at home. In the U.S., for instance, the reopening of Denso plants is in a holding pattern as the company waits to see how Toyota resumes production.
Some factories in the U.S. have begun preparing for the eventual restart, Denso said. Others have continued to make products deemed essential under local government requirements, such as aftermarket and service parts. This involves volunteer workers, in fewer numbers.
The company has shut down plants in Mexico and Argentina because of government directives. And Denso has suspended operations in other countries as well, partly as a result of plunging demand. But into early May, none of its plants in the home market of Japan had completely suspended output.
To help fight the pandemic, Denso rallied its manufacturing power to make face masks and face shields. In Japan, it plans to make 100,000 face masks a day for its own use. The idea is for the company to make its own masks and alleviate demand on the open market.
And in the U.S., Denso's plant in Maryville, Tenn., is cranking out thousands of face shields for health care workers. Denso also donated 2,000 N95 masks and 1,000 nitrile gloves to hospitals in Michigan and North Carolina. The company also is helping train medical and health care researchers how to use quantum computing in their search for better treatment of COVID-19.