Auto-parts plant fire hampers production

DETROIT --- A fire that closed an auto parts plant near Detroit this week is having ripple effects on five automakers, forcing two of them to close plants or cut production because they have run short of parts.


The impact of the blaze, at a Magna International Inc. interior parts plant near Howell, shows how years of work to make auto plants more efficient can fall apart when something interrupts the flow of parts in an intricate supply chain.

So far, the fire has forced General Motors Co. and Mazda Motor Corp. to stop making cars at some factories. The damaged Magna plant also makes parts for Ford Motor Co., Nissan Motor Co., and Chrysler Group LLC vehicles. Ford, Nissan and Chrysler factories have stayed open, but it's uncertain for how long as Magna studies options to reopen the plant or make parts elsewhere. The plant makes headliners, consoles and other interior parts.

For the past three decades, auto companies have cut costs and become more efficient by going to a just-in-time delivery system so they can avoid paying for huge stockpiles of parts.

To avoid buying costly machinery, many parts companies make a particular part at only one site, said Jim Gillette, an analyst for the firm IHS Automotive who advises parts suppliers. As a result, plants have few parts in storage, and the system fails if production is interrupted at a single factory.

"You can't do without the parts, even if it's a small part," he said. "Everything is pretty much single-sourced these days. It could be tough for them to get this thing going again."

Magna officials worked Friday to see whether the plastic injection molding equipment at the plant had been damaged in Wednesday's fire, said company spokeswoman Tracy Fuerst.

Fuerst said the company is looking at options, including trying to get machinery running in the same location, moving it to a nearby factory or figuring out whether other Magna plants could make the same parts.

GM canceled shifts Thursday at assembly plants in Flint, Mich., and Lordstown, Ohio, and made changes at several others because of the fire. GM spokesman Chris Lee said it's wait-and-see for other factories including transmission and parts plants.

Mazda spokesman Jeremy Barnes said the company shut down production of the Mazda 6 midsize sedan at a plant it shares with Ford in Flat Rock, Mich., south of Detroit.

The fire comes just as the recovery in U.S. auto sales was starting to accelerate.

February sales were up 27 percent compared with the same month last year, leading industry analysts to raise their forecasts for the year to above 13 million in sales. Last year automakers sold 11.6 million cars and trucks in the U.S.