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Japan quake impacts jobs in Vermont

March 31, 2011
NEAL P. GOSWAMI
Staff Writer
BENNINGTON — A devastating earthquake and subsequent tsunami a world away in Japan several weeks ago is just now beginning to impact a local company with strong ties to the Asian nation.

The 9.0-magnitude quake off the coast of Sendai, Japan, triggered a powerful tsunami that swept onto Japan’s eastern coast.

NSK Steering Systems America makes steering columns for several Japanese automakers including Honda and Toyota. Honda recently announced a two-week shutdown of production as Japan continues to struggle with the aftermath of the natural disasters, and power issues following the near-meltdown of several nuclear reactors.

“It just started happening. It hasn’t been an issue until today,” said Greg Laurin, the senior human resources manager at NSK.

Plant Manager Greg Harriman said NSK will follow Honda’s “interim supply reduction” lead and stop making columns for some Honda models.

“Honda, for the next few weeks, has reduced production,” Harriman said. “Suffice it to say, our reaction to that would be to reduce production as well, which would make our head count smaller for those two weeks.”

Some of the company’s 265 or so employees will be impacted by having work time reduced to about 20 hours per week during the product line shutdown. Other workers will see their hours reduced to zero.

Laurin said the company is looking to first reduce temporary workers secured through an employment agency

before impacting full-time employees. “We would have [temporary employees] go out and keep our own full-time people as much as possible,” he said.Workers impacted by the short-term shutdown of some product lines will be eligible for unemployment benefits. A sister plant in Tennessee will also be impacted, Harriman said.

Subaru, meanwhile, has announced a two-day shutdown because of the natural disasters. Such a short delay is not uncommon, however, Harriman said. “Anyone can mention two days at any given point,” he said. “It could be any supply chain factor that creates that.”

Other automakers have yet to announce delays, but the situation in Japan is very fluid and changes daily, according to Harriman. For now, Toyota and Mercedes product are unchanged.

“We’ve tried to make people understand that we’re OK right now other than this, but it could happen to anyone. It could happen to Toyota. It could happen to Nissan,” Laurin said. “This is going to be something that is going on for weeks and months. This is not just going to stop.”

NSK has plenty of parts on hand to continue work through April, Harriman said. “Currently, we are not missing a single product in this plant,” he said.

The company has contracted to have some products flown to the U.S. from Japan because shipping by sea has been impacted.

“We are not out of parts. We are good on parts all the way through April. We are good even beyond that. We have four or five parts that we are looking at air shipping. It’s not a matter of we can’t get them,” Harriman said.

However, auto parts makers are at the mercy of each other. Cars cannot be assembled on a line if even one of the thousands of parts is interrupted, Laurin said. “Somebody in Honda’s chain doesn’t have parts. We have plenty and can keep making them, but somebody else doesn’t,” he said.

NSK employees were told of the temporary shutdown within hours after NSK management was informed of the delay by Honda, Laurin said.

NSK’s sister plants and sales offices were not located in the northeastern part of Japan where the quake occurred and the Tsunami struck hardest. So far, no casualties have been reported among NSK employees.

“No Japanese personnel in NSK have been affected directly by the tsunami,” Laurin said.

While the short-term future is murky, Harriman said NSK has secured new product lines well into 2013. The company will make some columns for Aston Martin, as well as ones for the Nissan Leaf and Rogue.

Contact Neal P. Goswami at ngoswami@benningtonbanner.com

 

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