Chip shortages force auto industry cuts
Slowdown could cost automakers $61 billion in lost sales this year
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-thanexpected rebound in vehicle demand. Recent weatherrelated 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 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.
The biggest auto companies aren’t the only companies getting squeezed by the chip crisis. Truckmaker Paccar on March 31 said firstquarter deliveries have been reduced by about 3,000 vehicles.
General Motors updated a recent notice to say that it’s doing a little better than expected at its Spring Hill Assembly plant in Tennessee.
The site was expected to resume production this week, a week earlier than it had expected. In addition, the automaker said it no longer expects to lose production of its Chevrolet Blazer at Mexico’s Ramos Assembly during the week of April 19.
GM planned to resume production at a plant in Wentzville, Missouri, the week of April 12 after a shut