Thu, Feb 19, 2015 - Page 6 News List

Japan automakers turn to airlifts amid US port row

PRODUCTION DISRUPTION:Honda, Toyota and Nissan have all started using air freight to keep their factories in the US running as the dock workers’ strike continues

AFP, TOKYO

Japan’s top three automakers said yesterday that a US port strike has hit their North American production with some resorting to airlifts to keep plants running at full steam.

Dock workers on the US west coast are reportedly on a go-slow and have not been supplying full crews for months in a bid to gain bargaining leverage in labor negotiations — a situation that led to a crippling french fry shortage at Japanese fast-food outlets last year.

Now, Japan’s major automakers say that the prolonged labor dispute is hitting their supply chain as they race to ship parts to North American factories.

“We have tried to procure parts by alternate means such as by air,” Honda Motor Co spokeswoman Yuka Abe said. “But the continuing strike action is slowing down cargo shipments and the company has not been able to supply enough parts in North America.”

Honda said it was trimming output at four plants in the US and Canada by a total of 20,000 units this week — mainly of the popular Accord and Civic — and added that a decision would soon be made on further production cuts.

Last year, Japan’s number-three automaker produced about 1.6 million vehicles in North America.

Rival Toyota Motor Corp, the world’s biggest automaker, said it was also resorting to airlifts and changing shifts to keep its factories humming, but added that the labour disputes were not having a “significant impact” on operations so far.

“Due to delays in the processing of overseas parts at the West Coast ports, we have adjusted overtime at some plants in North America as needed,” Toyota spokesman Nicholas Maxfield said in an e-mail.

“In an effort to minimize production disruptions we are expediting shipments by air,” he added.

Nissan Motor Co, meanwhile, said there had been “some impact” on its North American operations.

“As a result, Nissan started limited use of air freight to deliver auto parts from some countries in Asia to the US,” a Tokyo-based company spokesman said.

He added that Nissan sources many of its parts from North American-based parts makers.

US Labor Secretary Tom Perez on Tuesday urged shipping company executives and union leaders for 20,000 dockworkers to settle a contract dispute.

Perez was sent to join the talks in San Francisco by President Barack Obama, who has come under mounting pressure to intervene in the labor conflict that has rippled through the commercial supply chain across the Pacific and by some estimates could ultimately cost the US economy billions of dollars.

Perez met separately with each party, then met briefly with both sides together, and further sessions were expected yesterday, sources familiar with the situation said.

“Secretary Perez made clear that the dispute has led to a very negative impact on the US economy, and further delay risks tens of thousands of jobs and will cost American businesses hundreds of millions of dollars,” US Labor Department spokeswoman Xochitl Hinojosa said in a statement at day’s end.

Perez urged the parties “to come to an immediate agreement to prevent further damage to our economy,” she said.

Additional reporting by Reuters

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