SUPPLY CHAIN RISK--GM TO CLOSE 4 NORTH AMERICA PLANTS BECAUSE OF JAPAN QUAKES

GM to Shut Four Plants Temporarily After Japan Quakes

GM says shutdowns at North American assembly plants are a result of supply-chain problems from Japan earthquakes

ENLARGE

General Motors, cars are assembled in Spring Hill, Tenn. Photo: Associated Press

By

Gautham Nagesh

Gautham Nagesh
The Wall Street Journal                   
• 
  
• gautham.nagesh@wsj.com

April 22, 2016 12:20 p.m. ET

                               

General Motors Co. said Friday that it will shut down production at four North American assembly plants for two weeks starting Monday due to supply-chain problems caused by the recent earthquakes in Japan.
GM said it would temporarily shut down its assembly plants in Spring Hill, Tenn.; Oshawa, Canada; Lordstown, Ohio; and Fairfax, Kansas to mitigate a parts supply issue caused by the two devastating earthquakes that hit southern Japan just 28 hours apart last weekend.
GM said the temporary shutdown isn’t expected to have any material impact on its full-year production plans or its financial results for the second quarter of the year. Models affected by the shutdown include the new Cadillac XT5 crossover, which is built in Spring Hill, and the new Chevy Cruze, manufactured in Lordstown.

RBC Capital Markets analyst Joseph Spak wrote in a note that the production shutdowns could help GM and other auto makers as inventory levels have risen of late, though there could be some negative impact on parts suppliers in the second quarter.
“We know Toyota and Nissan have taken downtime as well. We await to see if others are impacted. But our view is that near-term disruption could help alleviate some near-term elevated U.S. inventory levels,” Mr. Spak wrote.
Write to Gautham Nagesh at gautham.nagesh@wsj.com