Automakers make contigency plans for West Coast imports
Automakers say they are aware of the risk of another labor stoppage.
“We have developed countermeasures in case of any disruption to operations. Our aim is to minimize any impact to our customers,” Toyota spokesman Ed Hellwig told Automotive News.
Toyota Motor North America uses multiple ports in California — Benicia, Long Beach, Port Hueneme and San Diego — as well as ports in Portland and Tacoma, Wash. Mostly it brings vehicles into North America, but the automaker also sends domestically built autos to Hawaii, Alaska and South Korea from some West Coast ports.
Hyundai Motor America uses San Diego, Port Hueneme and Portland for its West Coast operations.
“Our logistics affiliate Hyundai Glovis is closely monitoring the labor situation and works on contingencies daily to ensure the steady processing and delivery of Hyundai vehicles,” said spokesman Michael Stewart.
Nissan also is heavily reliant on the West Coast ports.
“We work closely with our supplier partners to constantly monitor for potential interruptions in the supply chain, and we develop contingency plans to help preserve the supply of parts and vehicles for our customers,” said spokesman Brian Brockman.
While automakers can make some adjustments if there is a work stoppage, their options are limited, Silberg said.
“Even though they can have contingency plans, that’s a lot of goods to get through, and if the whole thing shuts down, it would be painful,” Silberg said.
Moreover, KPMG’s analysis doesn’t include many electronic components that are used by the industry but aren’t identified by U.S. customs tracking as auto parts.
“As we have seen, if you are missing one chip, it could shut down or delay production and sales,” Silberg said.
A disruption at the ports would come as major Asian brands struggle to push inventory into the U.S. market. Toyota, Kia, Subaru, Honda, Lexus and Hyundai have some of the leanest U.S. stockpiles right now. Toyota dealers, for example, started July with less than two days of inventory on their lots, the company said.
It could get tighter. Honda Motor Co plans to cut production in Japan by as much as 30 percent next month from what it had planned because of supply chain problems and other logistical issues. Toyota said its global production in August will be 18 percent below its annual plan.