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Thursday / 23 September 2021
HomeNewsBig production cuts for car makers as chip shortage worsens

Big production cuts for car makers as chip shortage worsens

Automakers are expanding and extending production cuts at some North American plants as they cope with a worsening global shortage of semiconductors.

Chips for use in cars and trucks have been harder to come by as semiconductor makers have allocated more capacity to consumer products.

The pandemic has caused a surge in orders for smartphones, TVs and computers as people try to make extended life at home more bearable, leaving less capacity for a stronger-than-expected rebound in vehicle demand.

Recent weather-related disruptions of petrochemical supplies in the southern U.S. and a fire at a chipmaking plant in Japan have exacerbated the shutdowns.

Consultant AlixPartners has said the global chip shortage could cost automakers $61 billion in lost sales this year.

The recent setbacks could further delay an expected second-quarter recovery in output. “Production is shrinking, not increasing, so the balance between supply and demand is only getting worse,” said Takeshi Miyao, an analyst at researcher Carnorama.

Here’s the current situation for major auto manufacturers in North America.

General Motors

March 24: General Motors said its Wentzville, Missouri, assembly plant, which makes the Chevrolet Colorado and GMC Canyon, will take two weeks of downtime starting March 29.

The company’s Lansing Grand River plant in Michigan is extending downtime by two weeks. The factory, which makes the Cadillac CT4 and CT5 and Chevrolet Camaro, idled production March 15.

Starting the week of April 5, GM’s assembly plant in San Luis Potosi, Mexico — which has been down since Feb. 8 — will restart with two shifts. The factory makes the Chevrolet Equinox and GMC Terrain.

March 3: Automaker said its Gravatai plant in Brazil would be impacted by downtime in April and May.

Ford

March 22: The company halted production at a commercial vehicle factory in Avon Lake, Ohio, with plans to resume output on March 29. Ford also has dropped one shift at a truck plant in Kentucky until March 29.

March 21: Ford canceled an extra shift at the truck factory in Kentucky.

March 18: Ford said in a statement it canceled night shifts for two days at another assembly plant in Louisville — where it makes the Ford Escape and Lincoln Corsair — due to the U.S. winter storm in Feb. and chip shortage.

Stellantis

March 20: Stellantis, formed recently from the merger of Fiat Chrysler Automobiles NV and PSA Group, said production of its Ram Classic pickup trucks in Warren, Michigan, and Saltillo, Mexico, will be affected “for a number of weeks.”

Nissan

March 22: The Japanese automaker canceled production at a plant in Aguascalientes, Mexico, from Tuesday through March 24.

It also resumed output Monday on an assembly line at a factory in Canton, Mississippi, that had been suspended since March 20.

March 19: Nissan halted production on another assembly line in Canton from March 19 that it plans to restart on Tuesday. It also stopped a production line at a plant in in Smyrna, Tennessee, that it also hopes to restart Tuesday.

Toyota

March 22: An unspecified petrochemical shortage is affecting output of 10 models made at plants in Kentucky, Mississippi, Texas, West Virginia and Mexico.

“Our manufacturing and supply chain teams are working diligently to resume normal operations as quickly as possible by evaluating the supply constraint and developing countermeasures to minimize further impact to production,” the company said in an email.

Output has been curtailed for Toyota’s Camry, Camry Hybrid, Avalon, Avalon Hybrid, RAV4 Hybrid, Lexus ES 350, Lexus ES 300h, Tundra, Tacoma and Corolla models.

March 21: Toyota said it is trying to gauge the fallout from the fire at the semiconductor plant owned by Renesas Electronics Corp. Japan’s largest automaker accounts for about 6.6% of Renesas’ sales.

March 17: The dearth in petrochemicals affected output at the carmaker’s plants in Kentucky, West Virginia and Mexico, according to a spokesman who didn’t provide further details.

Honda

March 22: Honda’s purchasing and production teams are working to “limit the impact of this situation and are adjusting production as necessary,” the company said in an in an email, without elaborating.

March 17: The carmaker suspended production at some plants across the U.S. and Canada, including factories in Alabama, Indiana, Ohio and Ontario, blaming the impact from the pandemic, chip shortages and severe winter weather on its supply chain.

BMW

March 22: BMW “production remains unaffected” in North America, the company said in an email.

Tesla

Feb. 8: Electric-vehicle manufacturer said in a 10-K filing that “increased demand for personal electronics has created a shortfall of microchip supply, and it is yet unknown how we may be impacted.”

Daimler

Feb. 5: The Mercedes-Benz plant in Tuscaloosa, Alabama, was “running as planned,” a Daimler spokesperson said.

Hyundai

Feb. 5: The South Korean automaker said in a statement that it was “closely monitoring the situation and collaborating with our supplier partners to maintain stable production.”

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