According to al.com:
Production will likely be interrupted after April 1 at Honda Motor Co.’s six North America plants, including the one in Lincoln, due to a lack of critical parts as Japanese suppliers work to recover from earthquake and tsunami damage, the automaker said today.
Not just Japanese manufacturers such as Honda, Toyota and Nissan are suffering; Ford Motor Co. will have to close some plants next week due to parts shortages resulting from the Japan earthquake and tsunami according to the ThirdAge.com.
“We also are pursuing other sources of supply as necessary and practicable,” the company stated in a regulatory filing. “Because the situation in Japan continues to develop, supply interruptions related to materials and components from Japan could manifest themselves in the weeks ahead.”
Alabama policymakers believe there is no other way to build an economy except by investments in these huge industries and clusters. However, these industries and the economies that support them are unhealthily dependent as evidenced by this tragedy. Healthy economies would have a myriad of networks and suppliers. Firms within a 21st century economies must be able to self-organize in response to global failures. Resilience and agility must describe our firms and local economies. As I argued here:
As we continue in this new century, we should continue to expect disruptions, shocks, and other unforeseen occurrences within various sectors of the economy. Similar to the collapse of the major banking and investment houses, other crises are poised to hit. Unfortunately, our present economic models have created an unsustainable economic environment. The current policies makers have done very little to develop flexibility and resilience within our local economies; instead, our local economies are quite brittle.
To protect ourselves, we must develop resiliency to these oncoming shocks. I am sure most of you have seen this commercial:
Our local economies must mimic this mattress. Although crazy and reckless things will happen in Wall Street or London or Tokyo, our local economies should be so well developed that, while we might rock a little from the recklessness, our local economies never tip over. We have seen how critically vulnerable our job security has become. From Randolph County, to Clay County, to Chambers County, to Lee County, jobs vanished over night and communities entered a death spiral. Because of events and decisions made without our input or concern for us, the economic security of many families crumbled.
The twenty-first century demands new ideas and strategies, a bottom-up approach, for enabling our local economies to flourish despite the craziness within Wall Street and global trade markets.
These shutdowns evidence the brittleness and vulnerability of our local economies. Could the Talladega/Clay/Calhoun region afford to lose 4,000 jobs for 60 or 90 days?
(According to the MailOnline, the Japanese earthquake and tsunami has forced Honda to halve car production at its British factory because of a shortage of parts from its homeland through the end of May. However, thanks to a working-time agreement that the union negotiated in 2009, there will be no loss of earnings for the workforce while the company cuts production. Once full production is resumed, the reduced volume production will be quickly recovered using the banked hours. Let’s see if there is any difference of treatment for Alabama workers. As I understand it, Alabama workers will the option of staying on the job for “non-production activities,” taking vacation time or taking leaves of absence.)
P.S. On a side note and possible counter-argument to this post, on March 29, Honda announced it will invest $94 million in Lincoln. According to the article, this investment will create 20 jobs according to the article.
UPDATE: According to the Huntsville Times, Toyota’s Huntsville engine manufacturing plant will suspend production on five days in April, starting next Friday. “On the non-production days, the company will keep providing employment for about 25,000 regular North American workers, the release stated. Employees not required to work have three options: Report to work for training and plant improvement activities, use vacation or take unpaid time off.”