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Shuttered auto parts plants in Japan could threaten supply chains in North America

March 22/2011

(ICIS) -- Shuttered parts plants in Japan could threaten supply chains all the way in North America, working down to the chemical industry - although it is too early to forecast what effects this may have, sources said on Monday.

General Motors (GM) already has suspended production at a plant in Shreveport, Louisiana, because of a parts shortage. Toyota, meanwhile, has curtailed overtime at its 13 vehicle and engine plants in North America, the company said.

Many supplier plants in Japan were destroyed or damaged by the earthquake, according to a column by Keith Crain, the editor in chief of Automotive News. If a key part is missing, a producer could suspend all production, cutting demand for bumpers, tyres and other auto parts.

That, in turn, could reach downstream to the chemical industry, as the automobile industry is a major end market for such materials as polypropylene (PP); nylon; acrylonitrile butadiene styrene (ABS); polyurethane flexible foam; synthetic rubber; and paints and coatings.

The American Chemistry Council (ACC) estimates that each automobile contains an average of USD 2.700 worth of chemicals.

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