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Quake Disrupts Japanese Businesses; Some Recovering Slowly

January 19, 1995

TOKYO (AP) _ The earthquake in southwestern Japan is forcing some of the country’s industrial giants to curtail production because the damage has disrupted the delivery of raw materials.

Heavily damaged roads and railway lines in the quake zone _ especially the port city of Kobe, a key transit point _ have choked off supplies. Some key supply plants also have been damaged.

Toyota Motor Corp., a pioneer of the ``just in time″ production system where raw materials are shipped as needed to keep inventories to a minimum and costs down, is proving a big victim.

The earthquake’s impact will halt the company’s overall operations. Toyota said it will close all of its auto assembly plants in Japan part of Thursday and all of Friday because of disruption of auto parts supplies.

The auto giant manufactures nearly 300,000 cars, trucks and buses at its domestic plants a month. It said none of its plants were damaged by the quake, but production was afffected by a disruption of supplies.

Two Toyota suppliers suffered quake damage: Sumitomo Electric Industries Ltd., which makes break calibers at its Osaka plant and Fujitsu Ten, a unit of Fujitsu Ltd. that manufactures radios for Toyota at its Kobe plant.

Toyota has sent 200 employees to help repair the damaged at the two companies, as well as to the affiliated Daihatsu Motor Co.

Daihatsu said it has lost production of 4,000-5,000 cars because of the shutdown of its plants in Kyoto and Osaka since Tuesday. It planned to resume their operations Thursday.

Honda Motor Co. said it was halting motorcycle production at its Kumamoto plant Thursday and Friday.

Several steel plants and at least three computer factories also closed. Most of the closed steel plants, including those run by Nippon Steel Co. and Kawasaki Steel Corp., reported power rather than structural damage. A Kobe Steel Ltd. plant suffered equipment damage.

Kobe Steel said it may take about one month for its Kobe steelworks to resume full operation.

An IBM-Toshiba joint venture factory that manufactures flat-panel displays for computers received minor damage but will reopen later this week.

The fallout from the earthquake reverberated to U.S. shippers and manufacturers.

The Boeing Co. said it was sending a representative to Kobe to assess damage to ShinMaywa, a company that supplies wing parts for Boeing’s new 777 jetliner.

Shipping trade between the United States and Japan also has been disrupted because of heavy damage to the port of Kobe.