Archive for May, 2011

Toyota’s Japan production will near normal in June

Tuesday, May 31st, 2011 | Finance News

TOKYO – Toyota production in Japan will recover to 90 percent of pre-disaster levels in June, faster than the world's biggest automaker had projected and highlighting its power to bounce back from the supply disruptions caused by the March earthquake and tsunami.

The disasters in northeastern Japan had damaged the plants of key parts suppliers, disrupting production at all Japanese automakers. Even with production increasing, some vehicle models could be in short supply for months.

Toyota Motor Corp. gave its good news to suppliers in a meeting Tuesday, company spokesman Keisuke Kirimoto said. It previously said global production would be at about 70 percent in coming months and was not expected to return to normal until late this year.

By the end of May, the crisis had cost the company production of 550,000 vehicles in Japan, and another 350,000 overseas. Production had been back recently at about 50 percent.

Toyota was initially missing 150 kinds of parts because of the supplier problems, and that was reduced to 30 parts earlier this month.

Other automakers are also suffering. Nissan Motor Co. expects worldwide production to be back at pre-disaster levels by October, and Honda has said normal production levels weren't expected until late this year.

Auto production in Japan plunged 60.1 percent in April from the previous year, according to Japan Automobile Manufacturers Association data released Tuesday. The 292,001 vehicles was a dramatic drop from 731,829 vehicles the same month a year earlier and marked the seventh straight month of on-year declines.

Toyota already said it will return to a faster-than-expected 70 percent of normal production in June in North America. It had cut North American production to about 30 percent of normal in May by idling factories for days or reducing workers' hours.

Some buyers of the new spacious "Prius a," or "Prius alpha," a revamp of the hit gasoline-electric hybrid, will have to wait until next year for deliveries.

That's because a key part, the lithium-ion battery, whose production was expected to be limited even before the disaster, will be even harder to keep making because of shortages, according to Toyota.

Japanese automakers are also facing another possible production problem in Japan — power shortages.

The Fukushima Dai-ichi nuclear plant was heavily damaged by the disasters and is being decommissioned. A second nuclear power plant, Hamaoka in central Japan, is being shut down while its tsunami defenses are strengthened. Many of Toyota's plants are in the region Hamaoka powers.

It is still unclear how serious the power shortage might be for Toyota because electricity will be transferred from other areas.

Japanese automakers are planning to make Thursday and Friday off-days and have employees work over the weekend, when power demands are lower, to avoid a power crunch and blackout rollouts during the peak use months of July, August and September.


Nokia warns earnings will be worse than expected

Tuesday, May 31st, 2011 | Finance News

HELSINKI – Nokia Corp. said Tuesday its second-quarter earnings will be worse than earlier expected because of falling sales and tough competition in the smartphone market.

Shares in the company plunged more than 10 percent on the news, to euro5.18 ($7.45) in afternoon trading in Helsinki.

The world's largest mobile phone maker said its performance in April through June will be "substantially below its previously expected range of euro6.1 billion to euro6.6 billion for the second quarter 2011."

The Finland-based company has been struggling against tough competition in the top-end smartphone market, especially against Apple Inc.'s iPhone, Research in Motion's Blackberry and on the software front against Android which has emerged as the top choice for phone makers that want to challenge the iPhone.

Nokia said that operating margins in the second quarter will be "substantially below its previously expected range of 6 percent to 9 percent ... primarily due to lower than previously expected net sales."

In the full-year the company said it was no longer "appropriate to provide annual targets for 2011."

Nokia said it is taking immediate action to address the issues that are affecting its devices and services division as its "high-level strategic objectives and targets remain unchanged."

In a major strategy move, Nokia in February announced major cooperation with Microsoft and said it would produce the first Nokia Windows cellphone before the year-end.

"Strategy transitions are difficult. We recognize the need to deliver great mobile products, and therefore we must accelerate the pace of our transition," CEO Stephen Elop said. "Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011."




TransCanada shuts Keystone pipeline due to leak

Tuesday, May 31st, 2011 | Finance News

TORONTO (Reuters) – TransCanada Corp has shut down its Keystone oil export pipeline for the second time in less than a month due to a small leak in Kansas, the company said on Monday.

The 591,000-barrel-a-day pipeline, which runs from Hardisty, Alberta, to Cushing, Oklahoma, was shut down this weekend after a 40-barrel leak at a pumping station in Kansas.

The leak was caused by a faulty fitting, TransCanada spokesperson Terry Cunha told Reuters.

A problem with a fitting was also blamed for a 500-barrel leak earlier this month at a North Dakota pumping station, though Cunha said that incident involved a different type of fitting.

The Kansas leak was discovered over the weekend and repairs are underway. The company gave no indication when the pipeline would be reopened.

(Reporting by Julie Gordon and Jeffrey Jones)