Abstract
The disruptions to the automotive supply chain caused by the cataclysmic events in Japan are likely to continue for some time and become increasingly severe. Even suppliers that are not directly or immediately affected likely will experience some disruptions to their supply chains as the difficulties encountered by many tier 2 and tier 3 suppliers continue to ripple upward. As OEM plants reduce their production schedules to contend with parts shortages, purchasing forecasts could be sharply reduced and, in some instances, even suspended, causing ripples back downstream. Buyers and sellers, OEMs and suppliers, with and without a physical presence in Japan, with direct supply relationships or multi-tiered relationships with Japan are absorbing the shocks. Prudent suppliers will proactively review their contractual rights and obligations at the earliest opportunity, before situations become critical.