It seems like the story that won’t go away. Every day it’s almost the same headline: (Insert auto company name here) to halt production on (insert vehicle name here) due to microchip shortage. And the news continues to get worse as several media outlets reported the chip shortage will linger into much of 2022, too. With all that being said, it seemed like a good time to recap some of the current production cuts that have been going on.
Each of these issues are frustrating not only for the consumers but also to the auto manufacturers and the laborers who often get temporary furloughs due to the halts. The short-term layoffs, supply chain shortages and ensuing production cuts lead to supply chain shortages at dealerships, which in turn lead to higher prices for the consumer.
The entire cycle touches every part of the automotive industry. A report from Forbes shows the financial fallout from these chip shortages is far reaching with impacts lasting for the foreseeable future.
So, let’s take a look at some of the recent production cuts.
Auto manufacturing is a global industry. With other parts of the world issuing more safety protocols due to the resurging pandemic, Toyota Motor Corporation (TMC) is feeling the impact globally. This week, TMC announced that they would cut global production next month by more than 330,000 units. That’s a big number and reports indicate that of those 330,000 units more than 80,000 will come from North America.
Toyota said in a recent public statement: “Although the outlook for November and beyond is unclear, current demand remains very strong. As a result, the production plan for November and beyond assumes that the previous plan will be maintained.”
The situation remains tenuous with a great deal of ambiguity, not just for Toyota for all manufacturers.
GM had a big week last week, with the reveal of the ZR2 trim of the Chevy Silverado. We covered it extensively with videos and stories. Arguably, the 2022 Silverado refresh was the biggest announcement this week, but it wasn’t the only news from General Motors.
GM announced some continued production halts at their crossover manufacturing facilities and the factories that build their medium sized trucks. However, in some good news, GM announced a return to work and a return to production for their five full-size truck and SUV plants.
“All of GM’s full-size truck and full-size SUV plants in North America will be running regular production,” spokesman David Barnas said in a statement. “The most recent scheduling adjustments are being driven by the continued parts shortages caused by semiconductor supply constraints from international markets experiencing COVID-related restrictions. We remain confident in our team’s ability to continue finding creative solutions to minimize the impact on our highest-demand and capacity-constrained vehicles.”
However, additional downtime will continue at other GM plants. The facilities that manufacture the Chevy Equinox and Blazer will be down until Oct. 1. Likewise, assembly plants for the Chevy Traverse, Buick Enclave, Chevy Colorado and GMC Canyon will face additional downtime due to supply chain issues.
It has seemed Ford has been the U.S. automotive manufacturer hit the hardest with the microchip shortage, but that’s only because 2020 and 2021 have been vital years for Ford Motor Company. With the launch of the Mustang Mach-E, next-gen F-150, Bronco Sport, the full-size Bronco and the all-new Maverick, the timing couldn’t be worse for Ford as they try to manage a large demand for their vehicles.
We reported this week that the hybrid variant of the Maverick was facing a temporary stoppage, which Ford dismissed as routine. However, with the First Edition Mavericks all being hybrids, this is not great news for the launch of this compact pickup truck.
The Bronco has had a fair share of production issues related not only to the hard tops but also to the microchip shortage. In positive news, Ford did announce the hard-top issue had been resolved, and this should hasten the Broncos to the dealerships and the anxiously awaiting customers.
However, no Blue Oval vehicle has felt the chip shortage impact more than the 2021 F-150. Just this week Ford announced it would idle production for a week at the Kansas City plant where the F-150 is manufactured. Combine this with the news of thousands of F-150s sitting in vacant lots, empty arenas and vacant race tracks while they await the microchip, and it’s not been great news for Ford as they try to get the best-selling nameplate in North America out to dealers and customers.
The microchip shortage is beyond frustrating for everyone involved. The auto industry affects so many people’s lives. The best advice is to be patient and understanding. As frustrated as you are about not getting your truck or SUV, think about the laborers who aren’t collecting a paycheck due to these production halts.
It’d be great to say we are turning the corner, but that’s to be determined. The demand for new vehicles is high. Hopefully the consumer’s patience is equally high.