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 Fuji Heavy Industries Ltd's Subaru, the fastest-growing brand in the
United States, said this week that it now had to shoulder an extra 7
billion yen ($60 million) in costs a month due to air freight, which
has seen prices go up with the extra demand.
"It looked like the labor talks were going well at one point but in
recent days the slowdown has grown quite severe," Fuji Heavy Chief
Financial Officer Mitsuru Takahashi said.
He said that without the move to chartered cargo flights, the
automaker's U.S. production would have come to a halt in
mid-February. "I think others are in the same boat," he added.
Ports along the U.S. West Coast have been experiencing severe delays
since October, due partly to lengthy labor talks between dockworkers
and the group representing shippers and terminal operators - a
situation reminiscent of the disruptions seen during the West Coast
ports shutdown in 2002.
The chief labor negotiator for the operators this week warned ports
were days away from complete gridlock. Union officials in turn
played down the potential for shutdowns, suggesting management was
exaggerating the situation as a negotiation tactic.
Toyota Motor Corp, which built about 2 million vehicles in North
America last year, has eliminated overtime at some factories in
North America, a spokeswoman said. The company declined to disclose
whether it was using air freight, adding only that it expected no
major change to its overall production plans.
Honda Motor Co and Nissan Motor Co said they had switched to air
freight for some components, from late-January and December,
respectively.
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Hyundai Motor said it was seeing no impact on production so far as
it had added and diversified shipping routes. Hyundai uses eastern
ports more than western ones to supply its factory in Alabama, a
spokesman said.
The last time dockworkers' contract negotiations led to a shutdown
of West Coast ports was in 2002, when the companies imposed a
lockout that was lifted 10 days later under a court order sought by
President George W. Bush.
The latest dispute had also forced McDonald's Japan to offer only
small-sized french fries temporarily and ship in some by air,
although a spokeswoman said its menu was now back to normal. KFC
Japan suspended sales of its fries last month, and it remains
unclear when they would restart, a spokeswoman said.
($1 = 117.3300 yen)
(Additional reporting by Ritsuko Shimizu in Tokyo and Hyunjoo Jin in
Seoul; Editing by Edwina Gibbs)
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