More Japanese plants grind to halt

Sony shut five more plants and Toyota Motor extended production halts, 11 days after disaster brought Japanese factories to a standstill and threatened to spark a recession.

Sony, Japan's biggest exporter of consumer electronics, suspended some work at five plants in the central and southern regions until March 31 because of trouble getting supplies after power outages, the Tokyo-based company said.

Toyota, the world's biggest carmaker, said all domestic assembly would be stopped until Saturday, while Honda Motor also extended closures.

Morgan Stanley estimated damage to the earthquake-stricken northeast, including disruptions to power and distribution systems, might cause the world's third-largest economy to shrink in the second quarter at an annual rate of 6 per cent to 12 per cent. A recession is "almost certain", according to Mizuho Securities.

"Companies' production and people's consumption will be stuck in an abnormal state at least for the next six months," said Naoki Iizuka, a senior economist at Mizuho Financial Group in Tokyo.

"The electricity shortage will continue to hamper economic activity."

The effect of parts shortages rippled through the supply chain, halting work at factories outside the region struck by the earthquake.

Canon, the world's largest camera maker, closed a factory in Nagasaki, about 1095km from Fukushima, until today, also citing problems securing components.

Sony's new closures increase its shut plants to 12 after the company halted operations at factories making products including Blu-ray discs and semiconductor lasers. The plants suspended on Tuesday make liquid-crystal display TVs, camcorders, cameras, mobile phones, headphones and broadcasting equipment, it said.

Sony said it may shift some production overseas if shortages persist.

"Further bottlenecks for components and disruption of operations at technology companies are expected in April and May," said Eve Jung, an analyst at Nomura Holdings in Taipei. "There's a risk that these companies may not be able to meet their second-quarter guidance."

Sony is pushing back recruitment by about two months to give opportunities to candidates dealing with the disaster, the company said. Sony had planned to begin recruiting next month.

Toyota decided to extend closures after checking the status of its suppliers, said spokeswoman Shiori Hashimoto. Toyota has lost production of 140,000 vehicles, with electronic parts, rubber and plastics in short supply, she said.

Honda, Japan's third-largest carmaker, will keep three plants in Japan shut until at least Sunday, it said yesterday.

Fujitsu, Hino Motors, Hitachi, Isuzu Motors, Japan Tobacco, Kikkoman, Mitsubishi Motors and Panasonic said they haven't decided when they will resume full production at factories shut by the disaster.

Toshiba, which has halted work at two plants, said a factory making small liquid-crystal display panels may remain closed for about a month.

Some companies are reopening plants. Nissan, Japan's second-largest carmaker, said it was resuming operations at six factories yesterday and planning to restart some vehicle assembly today. Canon resumed partial output at three facilities in northern Japan even as it closed the Nagasaki factory.

- Bloomberg

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