Published April 2003
Automakers
craft war contingency plans
By
John Wolcott
SCBJ Editor
Automotive sources
in Detroit say the Iraqi war shouldn’t have much impact on automakers’
ability to produce and ship their new cars and trucks.
Experiences after
the terror attacks of Sept. 11, 2001, and weathering the West Coast dockworkers’
strike have honed their procedures for keeping shipments of parts and
autos moving via land, air or sea to keep plants operating and dealers
supplied.
Delphi Corp., the
world’s largest auto-parts manufacturer, recently created what it calls
a “war room” at its Troy, Mich., headquarters where teams of production
and logistics staff are forming plans for alternate shipping routes or
using alternate suppliers if a certain country can’t be entered or shipments
are being delayed or blocked by the Iraqi conflict.
Also, the firm has
opened a new global Web site to link various employees in global shipping
and logistics operations with their colleagues at Delphi’s 190 plants
worldwide. The site enables Delphi employees to follow production activity
and track the movement of parts around the world.
Another major player
in the auto-parts industry, General Motors Corp., also has set up contingency
plans for getting needed parts to maintain production. After Sept. 11,
2001, for instance, GM used barges to float seats from a Lear Corp. plant
in Canada, across the Detroit River, to support its Hamtramck assembly
plant.
“Since 9/11 we’ve
paid a lot of attention to these issues,” GM spokesman Tom Wickham told
the Detroit Free Press. “We’ve got logistics, shipping and customs people
putting plans in place to cross borders or get parts where we need to.”
About 600 trucks
deliver parts from Canada to General Motors each day. To keep parts moving
across the border, about 100 of those vehicles are equipped with technology
that electronically sends customs agents at the border a manifest that
includes information about the driver, the trucking company, the parts
on board, where they’re from and where they’re going.
Overall, the industry’s
goal is to have in place several plans to get parts or materials to plants
across the world. If air travel from the Middle East becomes impossible,
some could be shipped by sea, or the part might be bought from another
supplier.
“We now group different
parts of the world by geography and threat level,” said Mark Lorenz, Delphi
vice president of operations and logistics, a former U.S. Marine who worked
in logistics during Desert Storm in 1991. “If we can’t get something out
of Israel or something erupts in Egypt or Turkey, we just execute the
plan to buy it somewhere else or ship via another method.”
Among the countries
Delphi has ranked as potential trouble spots are Kuwait, Iraq, Iran, Israel
and Saudi Arabia.
But the automakers
also have a built-in buffer that will help them in case car and truck
plants do shut down for a few days or weeks. Most of them, particularly
GM and Ford Motor Co., have a large inventory of new cars and trucks at
dealerships or assembly plant lots.
At the end of February,
the Detroit auto industry reported a 76-day supply of new vehicles, up
17 percent over the 65-day supply they usually have in place, according
to Merrill Lynch auto industry research.
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