Japanese car parts makers cut staff

Quietly rooting for Congress to bail out Detroit is the Japanese auto industry.

While American and Japanese automakers fight for sales on the car parts lots, they peacefully share one common trait behind the scenes: Both buy tons of auto parts from the same manufacturers.

Detroit auto executives Tuesday presented bailout plans to Congress, but throughout the industrial Midwest, analysts grappled with fears that Washington could reject a bailout or hand over too little money to keep the struggling companies in business through the recession, which has slammed auto sales.

Some lawmakers, as well as many consumers, figure that if Detroit goes under, American motorists could buy Asian and European models, said automotive analyst Rebecca Lindland.

U.S. factories established ties with foreign automakers as Detroit’s sales slumped to a current 47 percent of the market from more than 60 percent two decades ago.

Lindland, a market researcher for Global Insight in Lexington, Mass., said that view fails to take into account the U.S. auto-parts industry’s strides in becoming a crucial supplier to Japanese automakers as well.

For example, Delphi Electronics, a former GM division based in Kokomo, still depends on GM for the bulk of its business but also makes an electronic engine control module for the Toyota Corolla.

Analysts say a GM bankruptcy most likely would force the liquidation of Delphi, which employs nearly 4,000 in Kokomo and spends $85 million a year on 100 suppliers in Indiana. Toyota in turn would then have to find another source for the electronic module made by Delphi.

A handful of huge North American manufacturers — Delphi, JCI, Lear, Magna, Visteon — have become major suppliers to the Japanese. Hundreds of other independent factories supply those five and also ship to Japanese suppliers such as Keihin in Greenwood and Ryobi in Shelbyville.

The Japanese could probably fly stuff in (from Asia), but at least for a few months the situation would be chaotic,” said Susan Helper, a business professor at Case Western Reserve University in Cleveland.

Lindland, whose clients include auto-parts manufacturers, predicts a greater jolt for foreign automakers if large numbers of U.S. suppliers go out of business. She said the assembly lines of foreign automakers in the United States could shut down for at least one year while the auto-parts makers in Asia and Europe build up production capacity to supply operations in the U.S.

Asked whether Honda had a strategy to cushion itself from the shake-up in the U.S. auto industry, Honda spokesman Ed Miller released this statement:

“Honda encourages initiatives that are essential to maintain the short- and long-term stability and viability of the auto industry — and that includes the hundreds of supplier companies in the United States.”