Toyota plans U.S. production cutbacks

If you're in the market for a car, there's no time to waste. The Japanese automaker says that because of earthquake-related parts shortages, some production at its factories in North America will be shut down. A memo sent out to workers was quite vague, so who knows how long the shortage will go on. From the WSJ:

Toyota said said that the March 11 earthquake and tsunami that struck northern Japan cause "extensive damage" to many of parts suppliers that provide components to Toyota and other auto makers. "Our supply line has reached a point where it is clear we will incur some non-production time," the company's North American manufacturing arm said in a memo to workers. "The amount of non-production is still uncertain."

From Real Time Economics:

It doesn't take a supply disruption of many car parts to mean that a auto maker has to halt output for an entire plant, at least temporarily. You can't, for instance, send new cars to the dealership without speedometers installed, even though the rest of the car maybe perfect. Parts plants that were knocked out in Japan could have an outsized impact on U.S. manufacturing, explains Lou Ann Hammond, a car industry analyst at DrivingTheNation.com. For example, 5% of parts plants not operating could halt more than 5% of car production. These numbers are picked at random.

Toyota still has enough finished vehicles in the pipeline, as well as at dealerships, to keep deliveries going for a while.