Major auto companies are forced to halt or slow vehicle production due to the widening global shortage of semiconductors for auto parts. The auto companies are still recovering from pandemic-related factory shutdowns.
Ford Kentucky plant to shut down for a week
The officials at Volkswagen, Flat Chrysler, Ford, Toyota and Nissan all stated that they have been affected by the shortage and they were forced to delay production of some car models in order to keep their other plants running.
Ford has decided to shut down its plant in Kentucky for a week as the automotive industry struggles with a shortage of semiconductors, according to NBC News.
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The automaker's assembly plant in Louisville produces the Ford Escape and Lincoln Corsair SUVs, and employs about 3,900 hourly workers, according to a report by CNBC.
Ford stated that it will take a planned one-week plant shutdown that had been scheduled towards the end of 2021 and move it to this month instead. The plant in Kentucky makes the Ford Escape and Lincoln Corsair small SUVs.
Toyota's slow production
Toyota spokesman Scott Vazin said that the industry is currently having an issue and they are evaluating the supply constraint of semiconductors and they are developing countermeasures to help minimize the impact to production.
If the chip shortage will continue, production cuts could reduce the inventory of vehicles that are for sale in the United States and other markets.
That comes at a time when the industry was just starting to increase inventory lost when factories shut down last year to stop the spread of COVID-19. Toyota was forced to slow production of the full-size, Tundra pickup at their factory in Texas.
The auto industry is using more semiconductors now in new cars due to electronic features like Bluetooth connectivity, as well as driver assist, hybrid electric systems and navigation systems.
Semiconductors are silicon chips and they perform memory functions and control functions. It can be found in products ranging from computers and cellphones to cars and microwave ovens.
Auto sales decreased during the first wave of lockdowns back in April 2021, but it have since recovered. The new car sales in the US were down 34% during the first half of 2020, but it recovered towards the end as it was down only 15%.
The shortage in semiconductor chips that are needed in cars is just one of the examples of how the industry's flows of parts can have ripple effects in the products.
School districts last year had a difficult time to get orders for laptops for students who are going to classes remotely as personal computer makers struggled to secure processors and other components.
The issue started, when overseas factories making the chips were forced to shut down in the pandemic's early stages. The issue got worse in July 2020 when the government imposed sanctions on 11 Chinese companies due to labor abuses involving the Uyghurs.
Also, the schools found themselves competing for laptops against other companies that were also placing massive orders for their employees while they worked from home.
Chip shortages also forced Apple to delay the rollout of its latest iPhones until October or November 2021, according to Bloomberg.
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Written by Sieeka Khan
