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Toyota keeps sharp eye on struggling suppliers2013-01-30 08:53:00

TRAVERSE CITY, MICH. (Aug. 13, 1:55 p.m. ET) -- As Toyota prepares for record North American vehicle production in each of the next two years it is closely monitoring a group of suppliers struggling to keep up with demand.

The automaker is focusing on "less than 20" suppliers that may have trouble boosting production to meet Toyota's needs, said Robert Young, Toyota's North American purchasing chief.

In an interview, Young said he is keeping tabs on the group of suppliers, which are running their production lines six or seven days a week.

"They are struggling, and it's not sustainable," Young said. "We are asking them if they are maintaining proper maintenance schedules because they are running so tight."

Young says some of the suppliers -- those that provide "less than 10" components -- eliminated so much capacity during the recession that they will have to make sizable investments to meet rising production schedules.

Other suppliers in the group have encountered operational problems in their plants and can improve productivity without big investments.

Young says Toyota has asked each of the suppliers to specify the measures they are taking to fix the problem. Toyota also is dispatching engineers to their plants for on-site inspections.

Toyota expects to produce as many as 1.8 million vehicles in North America this year -- a production record -- followed by record production years in 2013 and 2014.

Young said last week the company was in the process of sending an updated production forecast to suppliers.

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