Tuesday, March 22, 2011

Indicators point to disruption in Japan market -- maybe

As this is written, the disaster in Japan is 10 days old and the initial shock and awe is past. We are now coping with the recovery from the earthquake and tsunami and living in dread that more bad news will emanate from the nuclear power plant in distress.

Fortunately, to the best of my knowledge, my friends and associates in Japan are all accounted for and safe, and for that we are extremely thankful, even while we share the sadness of the Japanese people for those dead and missing.

To talk about the economic condition of the country and specifically the situation in the manufacturing sector almost seems blasphemous since there is so much personal suffering to get past. But our attention has been diverted by events in Libya where once again our armed forces are involved in another political action so we can view global things more dispassionately

Several querists have asked my opinion of the Japan disaster's effects on the industrial laser industry. Since the issue is far from settled, it is hard to project the impact that a nuclear event might have because the situation, as they are wont to say, is fluid.

Already we have heard about the impact in the semiconductor and microelectronics industries and today’s Web alerts spoke of auto plant shut downs here in the U.S. as plants are coming up short on component inventory. At breakfast this morning, my wife, commenting on TV news about a shortage affecting GM, said that it “wouldn’t have happened if they placed orders here in the U.S.” I think that was a sarcastic remark, not typical of her.

According to my records, Japanese suppliers were planning to ship mot=re than 900 laser sheet metal cutters, 500 via hole drilling machines, and a couple of thousand laser markers along with assorted industrial lasers products. Word is that many of the suppliers are on a short work schedule or closed. So shipments will be affected; the questions are for how long and can the companies recover?

It is the end of the Fiscal Year in Japan and the last quarter revenues will be seriously impacted. I guess I'll have to put an asterisk against the Japanese numbers in my report this year, signifying that the numbers must be read in light of the earthquake and tsunami disaster.

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