I know you don't like to report negatives, but I believe you and other publications and news sources are missing and underreporting the near-term and long-term effects the earthquake and the damaged reactors and the overstressed electrical grid in Japan are having and will continue to have on world markets for their goods, including the U.S. marine industry.
Unlike the U.S., Japan, the world's third-largest industrial economy, did not send its high-end, high-value component manufacturing to China (i.e., semiconductors, precision glass products, motor controllers, etc.). These products are in every modern product manufactured and consumed worldwide.
Every handheld device has Japanese components in them. Japanese outboard motors have Nippondenso controllers with many high-value sub-components manufactured by other Japanese manufacturers. Japan, after World War II, embraced the philosophy of W.E. Deming, which not only improved quality and productivity, but led to what is referred to as "kanban - just-in-time manufacturing." With this philosophy there is no inventory anywhere. When the system is interrupted, everything stops. A restart of one company is monumental; a country based on this manufacturing system is something we will all now witness.
The priority is to restart with high-value necessities. Peripheral products, non-essential products are the last to be addressed. We all know no one needs a boat or motor.
The first effect now being seen is the high demand being put on Mercury for outboards and sterndrives from nontraditional customers (dealers and OEMs), to the point that they have temporarily removed outboards and sterndrive inventory and ordering capabilities from their online site.
The second effect: Many master Japanese outboard dealers have significantly raised their prices to small dealers and have intimated September might be the next open available ship date for popular motors like 115s/150s.
Most ships and containers, set to sail just prior to the earthquake, were destroyed, damaged or lost in the tsunami.
Most manufacturing factories that survived intact now are burdened by not having trained workers, as many either were lost or they are out looking for family members.
Rolling brownouts are commonplace and they are coming into a high energy-usage season - summer - with no way to meet demand.
When they do start shipping, the ships and containers and the goods inside most likely will be carrying trace radioactivity.
This radioactivity will or should trip the Homeland Security sensors at all our ports.
This is the nightmare scenario Homeland Security has feared - the slipping into the country of a suitcase-sized nuke.
This will slow the flow of hard goods into our markets and other world markets.
Already every U.S. nuclear power plant is reporting its sensors are picking up low-level nuclear fallout from the damaged reactors in Japan.
I'm not trying to be a fear-monger or to stampede the herd, but I am looking for factual information that might disprove any of the above.
My prayers are with the Japanese people.
— Carl Morahan
Fiesta Marine Products Inc.
Sightseer Marine LLC
Editor's note: A story about how the earthquake and tsunami in Japan have affected marine manufacturers will appear in the May issue of Soundings Trade Only.