Automotive and aerospace firms hit by Japan disaster

AUTOMOTIVE and aerospace firms in the West Midlands have taken a pounding on the stock markets in the economic turmoil following the earthquake and tsunami in Japan.

Shares fell across the board in the aftermath of the disaster and continued uncertainty over the immediate industrial plans of Japan’s leading manufacturers.

GKN, Hampson Industries, Umeco, Meggitt, Ultra Electronics, Manganese Bronze and Titan Europe all took hits over concerns components supplies to major projects such as Boeing’s long-delayed 787 Dreamliner project could be disrupted.

Concerns over Japanese operations in the UK such as the giant Toyota car plant in Burnaston, Derbyshire also arose.

Academics and industry commentators said the picture was still unclear so far as the long term impact on UK manufacturers.

Professor David Bailey, of Coventry Business School, said: “A lot of Japanese firms based in the UK have shifted to sourcing their component needs from local suppliers so the disruption may be minimal, at least in the short term.

“There are bound to be some critical components which would have to be shipped from Japan but not as many as people might think so for the full impact, I think we will have to wait and see.

“Where there could be long-term disruption is in research and development and other high level projects, which is nearly all done in Japan.”

Ian Wilson, defence and aerospace specialist at Grant Thornton, agreed it was too early to tell what the market turmoil held for the sector.

“The markets have been hit generally, not just in aerospace. There was a correction coming from Japan but this may have brought the whole process forward,” he said.
 
“I know that Boeing has mounted a watching brief on what has been happening but I’m not sure about what Airbus is doing.

“So far as the supply chain is concerned, I have to believe there will be some impact as a result of what has happened but how severe that will be, we will have to wait and see.”