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Subaru extends production shutdown in Japan *UPDATED*

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As we turn our attention from Toyota to Subaru, we note that the company’s USA-based Company News page contains only the following press release regarding post-Japanese earthquake and tsunami aid:

Subaru Responds to Japan Relief and Recovery

We are deeply saddened by the devastation resulting from the recent earthquake and tsunami in Japan. Our thoughts are with all who are suffering and we express our condolences to the victims of this tragedy.

Subaru of America, Inc. and its parent in Tokyo, Fuji Heavy Industries Ltd, are responding to the relief and recovery efforts. Fuji Heavy Industries (FHI), on behalf of all of its global subsidiaries, has made a financial contribution of 50 million yen ($500,000) to the relief and recovery efforts, and FHI employees have personally contributed another 10 million yen ($100,000). FHI has also donated an additional 50 million yen ($500,000) in Robin engine products of generators, lighting units, well and construction pumps.

Subaru of America, Inc. will provide matching funds for dealer and business affiliate contributions to the American National Red Cross up to $100,000, and double matching for employee gifts under a special program.

Our customers can join with Subaru in supporting the American Red Cross’ disaster relief efforts.

More information appears on Subaru parent’s Fuji Heavy Industries English-language Global Newsroom. The first of a quartet of news releases to date, issued on Monday 14 March, reads as follows:

Report Following Major Earthquake in Northeastern Japan

(1) Subaru Automotive Business: Gunma Plants (Gunma prefecture)
FHI will suspend all production activities at its all plants until March 16.

(2) Industrial Products Company: Saitama Plant (Saitama prefecture)
It will resume normal operation on March 15.

(3) Aerospace Company: Utsunomiya Plant (Utsunomiya prefecture) and Handa Plants (Aichi prefecture)
They are operating normally.

(4) Eco Technologies Company: Utsunomiya Plants (Utsunomiya prefecture)
They are operating normally.

Facilities and Production equipment
While FHI had some minor damages in its buildings and production equipments, it has no critical problem in its

FHI Employees
No FHI employees were injured.

Subaru Dealerships
Although FHI is continuing to assess the damage to Subaru dealership facilities, some dealerships in Iwate,
Miyagi and Fukushima prefectures, which are prefectures nearest the epicenter, have suffered severe damage. FHI has not yet confirmed the safety of all employees in those dealerships.

The second press release (from Tuesday 15 March) is a restatement of Fuji Heavy Industries Ltd.’s aid plans as outlined above in the USA news release, while the third one, issued the same day, simply extends the production suspension at all Subaru Plants until Sunday 20 March, in consideration of the situation at assorted parts suppliers as well as the rolling power blackouts due to conditions in Japan’s electric powerplants, most notably the Fukushima Dai-ichi complex of six nuclear reactors. The fourth press release, issued on Friday 18 March, is a further extension of this production shutdown, this time until Tuesday 22 March. Also indefinitely postponed, according to a Bloomberg story and Subaru spokesman Kenta Matsumoto, is the announcement of the company’s mid-term business plan that had been originally scheduled for Thursday 24 March.

Also, as with other Japanese carmakers, Subaru on Tuesday 15 March announced the elimination of overtime until at least Friday 1 April at the Subaru of Indiana facility in Lafayette that assembles the Tribeca, Outback and Legacy models (and the Toyota Camry), with a local Fox 59 News story citing Tom Easterday, Executive Vice President of Subaru of Indiana Automotive, that “the transmissions they use…come from Japan, along with the six-cylinder engines found in some of the vehicles…However…the vast majority of the parts are manufactured in the US and the cut-back in overtime is simply a precaution. If we should begin to run low on parts, by cutting back on overtime, we would be able to continue our regular production shifts.” Pay no mind, though, to persistent stories from The Detroit Bureau that Subaru has become the first Japanese carmaker to completely suspend production at a North American facility. The false rumor seemingly started when an Associated Press story accidentally mistyped production instead of overtime.

Obviously, even more uncertainty surrounds Subaru’s Japanese-built model lines, namely the Impreza and Forester. A chart posted by Edmunds AutoObserver notes that, on February 2011, Subaru’s inventory of new, unsold Imprezas was a 31-day supply, about half of the industry-ideal 60-day supply. Add that to the ongoing production shutdown in Japan and April could already see a marked scarcity of Imprezas at Subaru dealers. So how long are potential new Subaru owners willing to wait and cope with this situation? An article from The Detroit Bureau quantifies the answer thusly:

Despite its booming sales, Subaru truck buyers are among the least loyal. Nearly 29% would go elsewhere if they had to wait 90 days. But only 13% of Subaru car buyers would grow impatient and move on.

Indeed, that booming juggernaut sales increases that Subaru has been enjoying (263,820 vehicles sold in 2010, a 16% increase over 2009) may, sadly, be coming to a halt.

UPDATED TUESDAY 22 MARCH: Subaru has further extended production stoppages at all five of its automotive plants in Japan (Gunma Main Plant, Gunma Yajima Plant, Gunma Ota North Plant, Gunma Oizumi Plant and Isesaki Plant) until Thursday 24 March. Separately, Subaru plans to restart production of parts for overseas production on Wednesday 23 March and production of spare parts on Thursday 24 March, according to a Fuji Heavy Industries Global Newsroom press release.

Photo credit: Edmunds AutoObserver

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