GM curtails spending, travel on Japan crisis

CHICAGO Sat Mar 19, 2011 6:49pm EDT

An employee is reflected in a General Motors' Chevrolet MW, made by Suzuki Motor, at a Suzuki Motor showroom in Tokyo June 2, 2009. REUTERS/Toru Hanai

An employee is reflected in a General Motors' Chevrolet MW, made by Suzuki Motor, at a Suzuki Motor showroom in Tokyo June 2, 2009.

Credit: Reuters/Toru Hanai

Related Topics

CHICAGO (Reuters) - General Motors Co (GM.N) has suspended all nonessential spending and global travel while the automaker assesses the impact of the crisis in Japan on the company, a GM spokesman said on Saturday.

In addition, GM will suspend production in Zaragoza, Spain, on Monday and cancel two shifts in Eisenach, Germany, on Monday and Tuesday, spokesman Klaus-Peter Martin told Reuters.

Japan, reeling from a humanitarian and nuclear crisis after a massive earthquake and tsunami, is a key supplier to the global auto and technology sectors, making prolonged disruption a threat to both.

Automakers rely on "just-in-time" inventory of their supplies to build cars and trucks. Even a small supplier of products that are fed to a bigger supplier that feeds the automaker's assembly plants can delay or halt vehicle production.

Electronic products also are major components used in almost every auto produced in North America.

Analysts have said if the supply chain were broken for even a few weeks, the impact could be felt in auto production and higher prices or shortages of gadgets such as Apple Inc's (AAPL.O) iPad and other tablets, smartphones and computers for months to come.

The Japanese crisis, which has unfolded following a massive earthquake, tsunami and nuclear power plant disruption, hits the auto manufacturer as GM was gaining share in the U.S. market and as all automakers in the U.S. market looked forward to the spring months when sales rise. January and February are historically the lowest months for new vehicle sales in the United States.

GM is the top-selling automaker in the U.S. market, followed by Ford Motor Co (F.N) and Toyota Motor Corp. (7203.T)

(Additional reporting by Bernie Woodall and Nick Carey; Editing by Vicki Allen)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.