Autoblog

The Japanese island of Kyushu has become known as "Car Island" due to the influx of not only assembly plants, but also plants run by various car parts suppliers of the Japanese domestic manufacturers. In fact, 30 percent of all suppliers shacked up on Kyushu are affiliated with Toyota.

Kyushu happens to be close to the southeastern part of South Korea where Hyundai and other automakers manufacture about 1.65 million cars per years. Hyundai is beginning to use Toyota-affiliated parts suppliers from the Kyushu region, which the Japanese juggernaut sees as a growing threat from an aggressive competitor.

Toyota gets particularly miffed when suppliers sell parts that it helped jointly develop to other companies like Hyundai. In the past it let the transgression slide for competitors such as Honda and Mitsubishi because the practice resulted in lower prices on parts for Toyota itself. Apparently Toyota's would be willing to give up the discount if it means making life a littler harder for Hyundai.

Toyota no longer sees General Motors as its biggest competition, but rather the South Korean company that could. As such, Toyota is considering asking its parts suppliers not to sell to Hyundai and may resort to raising its stake in these companies in order to force them to do so.

Thanks PassingAlong for the tip!

[Source: JinBN]

Fitch Ratings announced yesterday that it has cut its ratings on Ford even further into junk status. The ratings firm cites the obvious elephant in the room as justification: the potential for parts suppliers to cause a disruption in manufacturing and the even larger threat of union strikes is growing by the day.

Though Ford’s recovery plan announced in January is meant to help the big Blue Oval reduce its cost structure and offset its dwindling marketshare, all might be for naught if a union goes on strike at one of the nation’s bankrupt parts suppliers and halts production at a number of Ford plants.