How the earthquake in Japan is impacting sidecar production in Russia

Dailies -

By

ural

The thing about making motorcycles in 2011 is that manufacturing is now truly global. A significant disruption in a key component source country such as Japan can interrupt production across the globe. That remains true even if you’re making a throwback to a WWII copy of a BMW R37 sidecar in Russia. Ural’s Ilya Khait explains how they’re coping with a natural disaster half a world away. — Ed.

Ural outsources components from over 60 suppliers in 13 countries, not counting Russia. Imported components make up almost 60 percent of the material costs of each motorcycle.

Logistics are pretty weird and complicated because of the location of the factory. Irbit is 1,500 miles east of Moscow and 150 miles from the nearest international airport or major railway station.

Ural gets its name from the Ural Mountains, where Irbit is located. Talk about remote, the factory is closer to Kazakhstan than Moscow.

We have two main flows of components. Parts from European suppliers are consolidated at our distribution center in Austria, then trucked all the way to Siberia, nearly 2,500 miles to the east. Components from Asian and North American suppliers are either shipped to the seaport of Vladivostok in Russia’s far east, then railed approximately 4,000 miles west to the factory, or sent directly to the factory by air.

Completed motorcycles intended for the European market are trucked back to the distribution center in Austria. Bikes for North America are trucked tot he port of Bremhaven and shipped by ocean to New York.

Normally, the factory has a stock of components for a bout a month of production, but sometimes we have more than that depending on the terms of the purchasing agreements and logistic costs.

We outsource three components to Japan — vacuum operated petcocks (Taiyo Giken Kogyo), alternators (Denso) and carburetors (Keihin). It looks like Taiyo Giken and Denso were not directly affected by the disaster, as their main manufacturing facilities are located in the southern part of the country. But unfortunately, Keihin seems to have been hit pretty hard.

Keihin’s factory in Kakuda is close to both the Fukushima nuclear plants and the tsunami-ravaged city of Sendai.

The Keihin facilities which manufacture motorcycle and automotive fuel control systems, including our carburetors, are located in and around Kakuda City, Miyagi prefecture. The city is located approximately 20 miles south of Sendai airport, five miles from the Pacific Ocean and 50 miles north of the Fukushima nuclear power plant.

Although some of their small subcontractors were located along the coast and swept away, the main Keihin factory was not impacted by the tsunami. But the earthquake and subsequent power and water supply disruptions seriously damaged equipment and tooling. Additionally, several subcontractors’ facilities remain inaccessible. Fortunately, almost all Keihin employees survived the disaster, but quite a few did lose property to it.

Keihin was able to partially restore power and water supply last friday, but are still assessing damage and haven’t provided any specifics as to when they’ll be able to resume normal operations.

Most of the roads in this part of the country go up the coastline and have been affected by the tsunami, so the damaged to the transportation infrastructure is going to be a major issue. Fukushima is also a concern.

Our current carburetor order was completed right before the disaster struck. Keihin was able to locate our parts early this week, but was unable to assist with delivery, so we had to organize a rescue operation ourselves. We now have a two to two-and-a-quarter month supply of Keihin carburetors.

We started working on a backup plan in the first hours following the disaster. One look at a map was enough to realize that things might get pretty ugly. We came up with a temporary solution and continue working with one of our suppliers on a permanent fix, just in case Keihin won’t be able to restore production in the next three or four months. It’s also pretty clear that, even if Keihin is able to restart production soon, its first priority will be major customers like auto manufacturers. Large motorcycle companies will follow, small guys like us are a distant third.

Overall, it’s pretty difficult to figure out how much this disaster has damaged the global motorcycle industry. Everything and everybody is so interconnected that affects could be both direct (like with Keihin) and indirect. Some of the European telescopic fork manufacturers use Japan-made precision steel tubes, for instance. Of course, and that’s just one example.

Click here for all our Japan disaster coverage.

  • Corey

    fascinating – ‘just in time’ in Kazakhstan via Miyagi. worth my two bucks a month right there. Very interesting.

  • Gregory

    How impressive! I love learning how the world works. This reminds me of “The Travels Of A T-Shirt In The Global Economy” book.

    It just goes to show you: “made in…” labels are blatantly, impossibly, false.

    -gceaves
    2008 KLR 650 w. milkcrate

  • Tom

    top marks for this! very interesting.

  • Tom

    i wish we had mags like this in the UK……sigh

    • Scott-jay

      Tom, this mag’s a cloud.
      Ain’t it cloudy in UK? : )

      • http://www.urbanrider.co.uk UrbanRider

        Well said!

    • http://hellforleathermagazine.com Wes Siler

      Wait, you mean magazines can be interesting? I, for one, just want to read superbike shootouts in which every bike is declared a winner.

  • Devin

    Very interesting.

  • markbvt

    Interesting article — thanks for the perspective. I had suspected that the disaster in Japan would have ripple effects throughout the industry due to component supply disruptions. This will affect Triumph as well, for example, as they use Keihin fuel-injection systems on many of their bikes (possibly all of them).

    I imagine a lot of companies are scrambling right now to try to source alternate components.

  • Archer

    I really do understand the purpose of this article.

    Please allow me to add a little perspective by mentioning that while Ural is “rescuing” its carb parts, 18,000 people will never have to worry about such matters ever again.

    I’m duly concerned about the disruption to motorcycle parts- after all, I have a stable of Hondas in the garage- it’s just that the 250,000+ homeless in Miyagi seem to me to be a slightly bigger priority. At least, at the moment.

    • Dumptruckfoxtrot

      I’ve been torn about the coverage by this magazine of the tsunami. On the one hand it is interesting and of course topical, on the other putting a sheep skull at the epicenter of a disaster thats killed thousands seems to be in questionable taste.

      I understand this article, I just feel like maybe the human toll could sink in a little longer before I started caring about if I can get parts for my motorcycle.

      • Ilya

        Well, I guess the point of the article is that this disaster has more dimensions that some of you may think.

        While I’m terribly sorry for 18,000 dead and 250,000+ homeless, it is my direct responsibility to worry about 150 people working at our factory in Irbit and dozens others who sell and service our product, whose well-being was also directly threatened by the disaster.

        This is why instead of watching terrifying live coverage from Japan, I had to organize “rescue” operation and talk to alternative suppliers.

        How about this perspective? Make sense?

        Btw, from today conversation with Keihin, it seems they are recovering faster than it was expected, and may resume operations as early as next week.

        • Archer

          Oh, yes, it makes sense. And your reply speaks volumes. Thank you for making your point of view so very, very clear.

        • http://www.brammofan.com Brammofan

          I get it. Thanks, Ilya, for providing a glimpse at what many companies and people thought of, right after “oh… the horror.” Namely, how can we keep our companies, our employees, our products, our families, safe from the after effects of this tragedy.
          Selfish? Sure. Is that always bad? IMHO, it’s human nature.

        • Dumptruckfoxtrot

          It makes sense and I appreciate the article and this reply.

  • always_go_big

    Interesting article, but you really could have waited a little longer to publish it.

    I thought it was only the TV news journos who like to have carnage as a backdrop when delivering their stories. Now it is HFL too, bit of a shame.

    • Gene

      Oh PLEASE. Don’t hurt yourself getting off your high horse.