HOTTER ON METALS: Auto supply chain gets harsh wake-up call from Covid-19

If ever there was a masterclass in the need to disaster-proof a supply chain, then the Covid-19 pandemic has provided a harsh reminder to the automotive sector that it’s failing.

It’s a wake-up call for the industry, which, after a massive earthquake and tsunami hit Japan in March 2011, had vowed to end its “just in time” production philosophy and diversify its supply chain in order to limit a repeat performance of the costly global disruption the Fukushima disaster caused. 

Not only did Japanese car plants shut down, but the global auto industry experienced a shortage of inputs including a specialty paint called Xirallic, a pigment known for giving vehicle paint its shiny effect.
The supply of Xirallic was hit because the only place in the world that made it, owned by Germany’s Merck Chemicals, produced and stored it within the disaster zone. The result was that automakers including Ford, Chrysler, Toyota and General Motors were forced to suspend vehicle sales in certain colors; Merck has since added storage facilities outside Fukushima.

And yet less than a...

Published

Andrea Hotter

May 05, 2020

22:25 GMT

New York