Chip shortage causes VW to halt production locally
Electronic chip shortage forces four-day shutdown
Chattanooga’s Volkswagen plant will suspend production for four days starting Friday as it grapples with the ongoing industry shortage in semiconductor chips.
Based on the current forecast for the component, the VW factory will stop assembly on Friday through Monday with plans to resume shifts next Tuesday, said Amanda Plecas, head of communications at the Chattanooga operation.
“A significant shortage of semiconductor capacities is leading to various supply bottlenecks in many industries around the world,” she said.
Plecas said that because of the increasing demand for consumer electronics for uses such as working from home, coupled with the recovering auto markets, a supply bottleneck
has arisen at production plants in the industry.
“In recent months, we have been working intensely and successfully to minimize the effects of the global semiconductor bottleneck on production in the entire [Volkswagen] Group,” she said. “This is why production has not yet been affected on a larger scale.”
VW’s Chattanooga operations employ more than 4,000 people, and it’s hiring to find enough workers to meet demand to produce the Passat sedan and Atlas and Atlas Cross Sport SUVs. Also, VW is investing $800 million to produce a new battery-powered SUV in 2022 called the ID.4.
Tom du Plessis, Volkswagen Chattanooga’s chief executive, said recently that the plant likely will have its best-ever year in terms of volume assembly in 2021.
During the four-day suspension, all Volkswagen Chattanooga salaried, indirect, maintenance, ID.4 pre-series activities and battery assembly shop teams will continue to operate as normal, Plecas said.
While Volkswagen officials believe the supply of chips will continue to be strained in the coming months, they’re not speculating about further impact to production or the workforce, she said.
The VW spokeswoman said officials are “continuing to monitor the situation and work with our suppliers.”
Plecas said the Chattanooga plant is not producing vehicles without the chips and parking them until the components arrive and then making installation.
At Volkswagen’s plant in Mexico, production of the Jetta sedan and Tiguan SUV models will be suspended for longer periods due to the semiconductor shortage, according to the company.
Jetta production will be halted Monday through May 19 and Tiguan work will stop Thursday through May 16. VW said in a statement that “we assume the chip supply will continue to be complex in the coming months.”
The shortage has already forced Ford to build F-150 pickup trucks without some onboard computers.
The trucks will be held at factories for “a number of weeks,” then shipped to dealers once computers are available and quality checks are done.
The global semiconductor shortage forced Honda and Toyota to announce production cuts at some North American factories. General Motors also has been forced to build pickups without some computers and install them later.