	Introduction

The March 2011 Great Tohoku Earthquake and Tsunami struck the northeast coast of Japan. As a result, the motor vehicle supply chain differs in important ways from supply chains for other manufactured products, such as electronics and apparel. In turn, the absence of industry-wide standards has led to the widespread customization of parts and vehicles. Suppliers are often the sole source for specific parts." Electronic ignition was one of the first major innovations. Impact on the Parts Suppliers

A number of automotive products have been affected by the Japan disasters, especially certain microprocessors and a unique paint pigment, which are produced mainly in the earthquake-stricken region. Xirallic pigments were among the first automotive inputs to be affected by the Japan disasters because the only plant in the world that makes them, owned by Merck Chemicals International of Germany, is near the Fukushima nuclear reactor. Other Parts Issues. An example of this domino effect is Keihin Corp., which supplies Honda with manifolds, engine control units, and other components. Impact on Automakers

The March 11 disasters temporarily closed the plants that make 17 of the top 20 models of Japanese vehicles sold in the United States and prompted General Motors to close a plant in Louisiana and Peugeot a plant in Europe. Of the coastal area affected by the natural disasters, Nissan and Toyota operate assembly plants in Fukushima and Miyagi prefectures, respectively. The Chubu plant is more strategically located in Japan's auto-producing region southwest of Tokyo. IHS Global Insight, an international economic and financial consulting firm, has forecast the impact of the disasters on auto production. The shortages in the Japanese automaking supply chain may be new opportunities for the Detroit 3 and South Korean automakers, all of which have been affected far less. Honda, which builds about 26% of its vehicles in Japan, expects its global production to return to normal by the end of this year. Ford had planned to idle some of these plants later in 2011, but moved up the schedule because of a shortage of undisclosed Japan-origin parts. IHS Global Insight forecasts that of the 4.2 million vehicles that IHS believes will now not be built in 2011 based on their pre-earthquake projections, 90% of the lost volume will stem from Japanese OEMs in their global operations, including the United States. In the United States, the loss of production will be felt over the summer most keenly at the Japanese transplant facilities and suppliers, primarily in the Midwest and South, where Japanese OEMs operate their manufacturing facilities. Congress is interested in the global motor vehicle supply chain for several reasons. Japan is a major trading partner and ally in Asia, and the restoration of its industrial production is central to strengthening the world economic recovery.
The March 2011 Great Tohoku Earthquake and Tsunami devastated the northeast coast of Japan with the most powerful natural disaster in Japan's modern history. Compounding the challenge for Japanese government, businesses, and communities was the resulting destruction of several nuclear reactors in the region which supplied electricity for homes and industry. Not only was electricity unavailable, but a large area was temporarily evacuated, making rapid reopening of affected industries impossible.
Located in the disaster region and adversely affected by these forces are a number of manufacturing facilities which are integral to the global motor vehicle supply chain. They include plants that assemble automobiles and many suppliers which build parts and components for vehicles. Some of the Japanese factories that were forced to close provide parts and chemicals not easily available elsewhere. This is particularly true of automotive electronics, a major producer of which was located near the center of the destruction.
The effect of these disasters has been first and foremost borne by Japanese automakers, which closed many of their Japanese assembly plants for several weeks as they assessed their supply chain issues and impact on their Tier 1, 2, and 3 suppliers. Japanese motor vehicle plants in other parts of the world have also been affected, including facilities owned by Toyota, Nissan, Honda, and other manufacturers in the Midwest and South of the United States. Detroit 3 automakers, by contrast, are less affected, although they, too, have taken extraordinary steps to keep production moving, including visiting suppliers in Japan to help them rebuild, locating alternative sources for some parts and chemicals, and shifting plants' summer vacations to accommodate the loss of parts.
IHS Global Insight, a global consulting firm, forecasts that over 4 million units of vehicle production will be lost because of the disasters in Japan, with 90% of them from Japanese automakers. It is possible that a shortage of some popular Japanese vehicles may develop over the summer in the United States. The Detroit 3 and South Korean automakers may be able to fill a portion of whatever demand Japanese producers are unable to meet.
Congress has shown an interest in the economic effects of these disasters, and at least one hearing has been planned to examine the effects. Not only is Japan one of the United States' largest trading partners, but it is also an ally in Asia, and its rebuilding is an important step in global economic recovery. In addition, Congress may be interested in evaluating the resilience of global supply chains as a result of new information about the vulnerabilities of supply chains in the automotive sector.