The recent earthquakes and tsunami in Japan have given rise to an unanticipated headache for businesses as supplies of Japanese-made electronics dry up. While the issues so caused are minor in comparison to the problems facing the Japanese government, they are, nevertheless, going to make significant ripples in economies.
As Japanese factories and production plants close because they are forced to close or because their workers are needed elsewhere, goods and spare parts cease to be made. Other Japanese factories face operating problems due to lack of fuel and intermittent or unreliable power supplies.
General Motors and Boeing have already reported difficulties. GM, the US’ largest manufacturer of automobiles has been forced to stop work at its Louisiana Truck Plant because of a lack of replacement parts. Meanwhile, Boeing’s management has been worrying about how they are going to cope when nearly a third of the parts for its new 787 Dreamliner are due to be supplied by Japanese companies.
Apple are also likely to suffer. Their new iPad 2 has been selling like hot cakes however the battery, flash memory and 3 other major parts are all made in Japan. Supply problems are likely to put a major dent on its revenue as well as damaging the product’s image.
At the moment only the largest of corporations are being hit but this is likely to have further knock-ons down the line. Unless, and it is highly unlikely, Japan can get back to ‘normal’ in the next week or so, many other companies are likely to be hit too.
Have you been affected? No matter in how small a way, we’d like to hear.
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