The Financial Times reports that GM and Toyota have told their component suppliers in Asia and Japan to stockpile spare parts in Europe in case a US invasion of Iraq leads to disruption of shipping through the Suez Canal.
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According to the FT, General Motors in Europe has ordered suppliers to its European plants to hold ten days’ extra supply of parts shipped from Asia.
The article also says that Toyota, which has vehicle assembly plants in France and the UK is stockpiling a ‘few days’ extra parts and vehicles’ in case of disruption.
The FT points out that stockpiling can only add to vehicle makers’ costs. The vehicle makers have developed just-in-time systems that keep inventory to a minimum, but that means that they are vulnerable to any supply chain disruption.
General Motors also told the FT: “We have told our suppliers not only in Japan but the entire Asia-Pacific region that they need to take precautionary measures to be able to meet their supply obligations.”
“We have also told those suppliers that receive materials from that region that they need to increase their stocks accordingly.”
