After quake, uncertainty about Priuses, silicon chips and other Japanese exports

The earthquake in Japan continues to threaten the U.S. autos and electronics industries with potential shortages, as plant shutdowns have limited production of silicon wafers for computer chips, led to supply problems that triggered temporary layoffs at two General Motors plants, and helped boost the price of the popular Toyota Prius.

With clogged roads, a nuclear accident and rolling blackouts retarding Japan’s recovery, Honda and Toyota extended their post-quake plant shutdowns until at least next week.

“A decision on when vehicle production will resume in Japan has yet to be made,” Toyota said in a statement Tuesday.

In many cases, manufacturers said that though they currently have enough Japanese-produced supplies, uncertainty over when production will restart there has clouded business prospects.

About a quarter of the global production of silicon wafers used to make semiconductors has been suspended because of the disaster, according to IHS iSuppli, a market research firm.

“These companies supply not only domestic Japanese demand for wafers but also semiconductor manufacturers around the world,” according to a IHS iSuppli report issued this week. “The suspension of operations at these plants could have wide-ranging implications beyond the Japanese electronics industry.”

It predicted that the most severely affected segment of the industry will be memory devices.

“Anybody who is making a PC or cellphone — Hewlett-Packard, Lenovo, Dell, Apple, Motorola, RIM — is going to feel upward price pressures,” said Dale Ford, senior vice president of IHS iSuppli.

Automakers, anticipating possible shortages of parts made in Japan, are bracing for production stoppages.

Already, an unspecified parts shortage has led General Motors to suspend operations at its plant in Shreveport, La., where about 1,000 people make mid-size pickups. GM has also shed 59 workers at an engine plant in New York. Operations at GM plants in Spain, Germany and South Korea also have been affected.

“We are monitoring the situation, and this could change by the hour,” GM spokesman Klaus-Peter Martin said.

“Globally, we haven’t had any interruptions at this point — but I keep emphasizing ‘at this point’ because it’s a dynamic situation,” said Todd Nissen, a Ford spokesman. “We’re meeting daily and sometimes hourly on this.”

With the uncertainty over when production will begin, Japanese automakers sought to assure dealers that inventory would be coming.

“The car business really is international, and it’s reasonable to assume that when manufacturing operations in one country are impacted, there will be some ripple effect,” said Jack Fitzgerald, owner of Toyota dealerships in Gaithersburg and Chambersburg, Pa.

The primary impact is expected to be on cars made in Japan, particularly the popular Toyota Prius.

The typical prices paid by consumers for Priuses have jumped $1,800 since the earthquake, according to an analysis by Truecar.com, the automotive Web site. Jesse Toprak, a Truecar analyst, said the jump is largely because of the perceived shortage and partly because of rising gas prices.

Tom Rudnai, president of Longo Toyota-Lexus near Los Angeles, one of the largest Toyota dealers in the nation, said rising gas prices and growing demand were already putting upward pressure on Prius prices, although he said his company does not sell cars above the manufacturer’s suggested retail price.

“It all comes down to supply and demand,” he said. “Transaction prices have creeped up.”

Peter Whoriskey is a staff writer for The Washington Post handling investigations of financial and economic topics.
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