Detroit

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The two American auto struggles could create some issuesfor Toyota. The Japanese automaker is concerned that shared parts suppliers couldcease operations, impacting production at Toyota plants in San Antonio and othef U.S. cities. On May 14, Chrysletr LLC filed a motion withthe U.S. Bankruptcy Couryt seeking to reject agreements with nearlhy800 U.S. dealers. “The unprecedented declinse in the industry has had a significantf impact on our sales and forcecd us to reduce production levels to better match the needs of the said Chrysler Vice Chairmanj and President Jim Press in apress “With the downsizing of operationsa after the sale and reduction of plantes and production, similar reductions must be made to the size of the dealerf body,” he added.
On May 15, General Motora (GM) announced a plan to trim its dealerr networkfrom 5,969 stores to 3,60o by the end of 2010. “Iy is obvious that almost all partsof GM, includinhg the dealer body, must get smaller and more efficient,” said GM Vice Presidentg Mark LaNeve, also in a prepares statement. Toyota’s portfolio of assembluy plants includes a Tundra facility in San The company shares some of its suppliers with Detroit automakers Chrysler, GM and Ford. “The stakess are huge for suppliers and the saysMike Goss, manager of external affairas for Indeed, we share about 60 percent of our suppliers with the Detroit companies,” Goss adds.
“Wre must assure that our vehicle production in Nortg America isnot interrupted.” Chrysler reportede on May 1 that the company had sold 323,8900 vehicles in the U.S. during the first four months ofthis year. That’s a 46 percent drop from the same periordin 2008. GM sales were down more than 30 percenft in April comparedto 2008. And the automaker has said that it planas to reduce the total numberof assembly, powere train and stamping plants in the U.S. by 28 percent (down to 34) by the end of 2010. Toyota’s year-to-date sales in the U.S. though April 30, 2009, were down 37.8 percentr compared with the same four-month perior in 2008.
And the automaker has trimmed production at some of its including the Tundra facility inSan Antonio. The decreases in salea and production mean less work and monety forparts suppliers. , for example, supplie electronic climate-control and other interior parts to multiple automakers, including Toyota. Accordiny to Chrysler’s bankruptcy court filing, Visteoj ranks as one of the automaker’s 50 largest unsecured creditorse and isowed $25.6 million. “Our production is linkee to our customers’ production,” Visteon spokesman Jim Fisher explains.
Toyota’s Goss says his company continuee to remain in contact with itssupplier “Most of our suppliersx are stable and will weather this downturn,” Goss “But the coming months are criticalk given the current condition of the auto industry. “Somde companies’ factories will be closing in the near Goss adds. “And we are working hard to understanc the impact onour suppliers.
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