Disaster Puts Toyota’s Credit Rating at Risk
VOA Breaking News (Voice of America)
April 6, 2011 at 9:55 am
Japanese automaker Toyota may have its credit rating downgraded in the aftermath of last month’s earthquake and tsunami, which forced the company to shut down production at its assembly plants in Japan.
Ratings agency Moody’s Investor Service said Wednesday it was reviewing the company’s rating because of the potential financial impact on Toyota from the twin disasters.
The March 11 disasters led to power shortages across Japan, forcing Toyota to shut down production at all 18 of its domestic plants three days later. The company has since reopened only two plants that build Toyota’s popular Lexus and Prius hybrid models.
Moody’s says the earthquake and tsunami appeared to have disrupted the shipping of 500 components for Toyota vehicles, and that normal production will not resume for several months, resulting in a loss of more than 200,000 vehicles.
Toyota says the the supply disruptions will also force it to suspend production at some of its factories in North America.
Toyota is still struggling to overcome a series of global recalls involving a number of design failures, which affected around 10 million vehicles.
Another ratings service, Standard and Poor’s, downgraded the automaker’s rating shortly before the deadly earthquake struck Japan.