Skip to main content
Sister Publication Links
  • Automotive News
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
Subscribe
  • Subscribe
  • login
  • HOME
  • News
    • News by Brand
    • Auto Shows
    • Photo Galleries
    • Automakers
    • Suppliers
    • Retail
    • Dealer Best Practices
    • Government Relations
    • Trade and Tariffs
    • Technology
    • Labour
    • 1-pathfinder.png
      view gallery
      13 photos
      New vehicles are shouting their names out loud
      NUtoyota1.jpg
      view gallery
      7 photos
      2022 Toyota GR 86
      hummersuv_1.jpg
      view gallery
      4 photos
      2024 GMC Hummer SUV Edition 1
      bronco_moab.jpg
      view gallery
      10 photos
      Ford Bronco Easter Moab concepts
    • 1PLANT-MAIN_i.jpg
      How suppliers and automakers saved the industry amid a pandemic
      Automakers, suppliers tackle new crises together
      HONDA_20190508_FINAL.jpg
      Honda, Toyota most preferred by suppliers
      Lawsuit challenges Trump's authority on steel, auto tariffs
    • Vaccine Vial
      Suppliers working on vaccination sites in Ontario, but 'it's a fluid discussion'
      5AMBASSADOR-MAIN_i.jpg
      Canada-U.S. trade faces 'critical moment' that demands urgent action, businesses warn
      Britishvolt teaser image web.jpg
      Britishvolt eyes Canada for home to new battery factory
      5AMBASSADOR-MAIN_i.jpg
      Ottawa mulls exempting auto workers from Canada-U.S. border shutdown
    • New Hyundai Dealership Sign
      Hyundai Canada commits to adding more Black dealers to its network
      HGregoire President John Hairabedian
      Why dealers are wading into the murky waters of cryptocurrency
      Dealers want post-pandemic investment in IT, not showrooms
      Windsor
      Automakers, dealers could look to the service sector to fill jobs
    • Cumberland Honda in Amherst, N.S.
      Dealing with provincial border closures caused by COVID-19
      Luxury dealers break new ground with online purchasing, servicing tools
      Digital greeter named Janus pre-screens showroom customers for COVID-19
      How a small-town GM store casts a wide net to land customers and stay successful
    • GenesisG70-MAIN_i.jpg
      Hyundai recalls more than 100,000 Genesis luxury vehicles for possible fire risk
      5AMBASSADOR-MAIN_i.jpg
      U.S., Canadian execs lobby for USMCA relief
      6NAFTA-5.jpg
      Some Mexican automakers want more time to meet USMCA rules, official says
      Japan Prius prod 20 web.jpg
      Japan may ban sales of new ICE vehicles in mid-2030s, report says
    • 5AMBASSADOR-MAIN_i.jpg
      Canada-U.S. trade faces 'critical moment' that demands urgent action, businesses warn
      5AMBASSADOR-MAIN_i.jpg
      Ottawa mulls exempting auto workers from Canada-U.S. border shutdown
      5AMBASSADOR-MAIN_i.jpg
      Dispute brewing over USMCA rules
      Canadian Pacific Train Engine
      How pending rail merger could aid North American auto industry
    • GMMaps-MAIN_i.jpg
      GM expects to launch new in-vehicle navigation system in Canada later this year
      Porsche, Apple Music partner on infotainment
      Vietnam-tied hackers said to target auto industry
      Vehicle screens go super-sized at CES as tech catches up
    • Wuhan honda prod web.jpg
      Automakers push to reopen plants with testing and lots of masks
      Ford, UAW reach tentative pact in U.S. with billions worth of investment
      GM Canada says it will find 2,400 jobs for Oshawa workers
      FCA to idle Ontario minivan plant for 8 days, union says
    • Aston Martin
    • BMW
      • Mini
      • Rolls Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Fiat Chrysler
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Lancia
      • Maserati
      • Ram
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
    • Honda
      • Acura
    • Hyundai
      • Kia
    • Mazda
    • Mitsubishi
    • Nissan
      • Infiniti
    • Subaru
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
    • Volvo
    • Toronto Auto Show
  • Opinion
    • Blogs
    • Do automakers prioritize U.S. inventory over Canadian stock?
      BrightDrop.jpg
      Big questions remain when it comes to GM's $1-billion CAMI plant
      Bosch_information_domain_computer web.jpg
      Bosch, Continental battle to supply the brain of the connected car
      Unifor exceeded its goals during Detroit 3 talks
  • Canada Conversations
  • EVENTS & AWARDS
    • 2019 Canadians To Watch
    • 2019 Auto News Canada All Stars
    • Best Dealership To Work For
    • Register for the 2021 Best Dealership To Work For
    • Canada Congress Conversations
    • Retail Forum: Dealer Discussions
    • Leading Women Roundtables
    • Dealerships reboot for millennials
      Communication is key to keeping dealership family together
      How giving back to their communities helps dealerships succeed
      Green dealerships good for business and for hiring
    • Embrace millennials and technology or be left behind, dealers warned
      walker.jpg
      Magna CEO says USMCA will mean 'more jobs, more investment' in Canada
      Top auto execs to address industry upheaval at 2020 Canada Congress
      VIDEO: Why Ford's Hinrichs is bullish on USMCA
  • Jobs & Classifieds
  • +MORE
    • NEWSLETTERS
    • SUBSCRIBE
    • CLASSIFIEDS
    • PEOPLE ON THE MOVE
    • COMPANIES ON THE MOVE
    • WEBINARS
    • ADVERTISE WITH US
    • CONTACT US
    • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. Automakers
March 22, 2021 12:00 AM

Lack of microchips, seat foam and more halts production

Complications are hitting Ford, General Motors, Toyota, Honda, Nissan and Volvo

Laurence Iliff
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    1PROD-MAIN_i.jpg

    Keepening shortages of key auto parts such as microchips and seat foam are combining with packed ports and a cargo crunch to shut down auto assembly lines — even as dealers clamor for inventory to meet strong demand from increasingly confident consumers.

    Production complications are hitting Ford, General Motors, Toyota, Honda, Nissan and Volvo, the automakers said last week.

    Some said they will suspend production lines as they await parts, and others are selectively choosing which models to produce. Some are attempting creative workarounds, such as postponing the installation of certain electronic modules until after a vehicle is built.

    A supply chain mess

    Multiple problems are bringing down North American vehicle production

     

    • Microchips are still in short supply.
    • The pipeline for producing foam for vehicle seats has been interrupted.
    • Texas winter weather cut output of petrochemical-based resins and coatings.
    • Japan's February earthquake took some suppliers offline.
    • The world inventory of shipping containers is jumbled.
    • The industry is still working through COVID-19 limitations.

     

    The microchip shortage has converged with supply chain interruptions from natural disasters to create an operating challenge for an industry that has enjoyed improving sales since the second half of 2020. But the tension is sure to rise as retailers head into the traditional spring selling season with renewed hope amid widespread COVID-19 vaccination programs.

    "The current supply chain issues represent an unusual combination of factors, including shipping constraints, chip shortages and rising consumer demand," said Karl Brauer, executive publisher at CarExpert.com. "While consumer demand was a key component in 2020's reduced new-car sales, production and distribution constraints will likely be the limiting factors for 2021."

    In a clear escalation of the drama, Honda Motor Co. said that it will suspend production at most of its U.S. and Canadian factories this week after halting its Mexico plant last week.

    "We continue to manage a number of supply chain issues related to the impact from COVID-19, congestion at various ports, the microchip shortage and severe winter weather," Honda spokesman Chris Abbruzzese said. "In some way, all of our auto plants in the U.S. and Canada will be impacted, with most of the plants temporarily suspending production during the week of March 22."

    MULTIPLE CAUSES

    The causes for the supplier shortages are old and new.

    When the coronavirus pandemic hit last year and vehicle factories closed in a season of uncertainty, automotive manufacturers cut their orders from microchip producers. Electronics companies scooped up the available chip capacity for TVs, webcams and other goods for working and playing at home, analysts say.

    Global competition for chip capacity is intense: The newest gaming consoles by Sony and Microsoft — released last year — are still out of stock.

    The industry also has been coping with a shortage of shipping containers caused by the pandemic that is snarling the global movement of parts as basic as the plastic clips used to anchor vehicle floor mats.

    More recently, the power grid crash caused by the severe February winter storm in Texas froze production of microchips as well as petroleum products used for seat foam and automotive coatings.

    A resulting shortage of polypropylene has doubled the price of the material. Some plastics-related Tier 2 and Tier 3 suppliers have been down for two weeks or longer. And some told Automotive News last week that problems related to petroleum-based automotive resins, nylons, foams, fibers and plastics could stretch three to six more months.

    "There isn't a supplier that hasn't been affected by the shipping delays, polypropylene shortage or microchip scarcity," one plastic parts supplier said.

    In addition, the Feb. 13 earthquake in Fukushima, Japan, took some Japanese auto suppliers offline, reducing parts headed to Honda and Toyota in North America.

    "Both companies had already scaled back the imports of parts to their U.S. operations in February, likely reflecting the well-flagged issues with semiconductor shortages," said a research note by Panjiva, a unit of S&P Global Market Intelligence. "Both may face additional challenges."

    And late last week — making the dire situation even worse — one of the world's largest suppliers of microchips to the auto industry, Renesas Electronics Corp. of Japan, reported that a factory fire has halted production at one of its Japanese plants.

    Impact on automakers

    It was unclear to what degree the new shutdown might exacerbate already strained chip supplies in the weeks ahead. But even without the added problem, automakers said they are taking production hits.

     

    • Toyota said last week that supplier shortages will impact production of the Camry, Camry Hybrid, Avalon, Avalon Hybrid, RAV4 Hybrid, Tacoma and Corolla, and the Lexus ES 350 and ES 300h, at plants in the U.S. and Mexico.
    • Volvo Cars said in a statement that it is reducing production at its South Carolina plant that makes the S60 sedan for global markets. The automaker said it is taking proactive steps to stabilize its supplies.

     

    "We expect the situation to remain volatile during Q2 and we have therefore decided to take action now to stabilize the situation and mitigate the impact on production," the company said. "This means that we have temporarily halted production in our S.C. plant but we will continue to work with our suppliers to ramp up component volumes as soon as possible."

     

    • Ford said last week it had canceled a Thursday evening shift and both Friday shifts at its Louisville Assembly Plant in Kentucky, where it builds the Ford Escape and Lincoln Corsair crossovers. Louisville Assembly has faced numerous disruptions because of the chip shortage.

     

    Ford said output in Louisville would return to normal by Tuesday, March 23.

    Ford has said that if the shortage persists through the first half of 2021, it could affect adjusted earnings before interest and taxes by between $1 billion and $2.5 billion. But the company also assured dealers that it will have "no negative impact" on the retail business.

    Regarding the electronics modules temporarily being left off the F-150 and Edge, Ford said it will build and hold affected vehicles for a number of weeks, then ship them to dealerships once the missing modules are available and it can finish comprehensive quality checks. The modules needed for the affected vehicles are tied to basic vehicle functions, such as windshield wiper motors and infotainment features.

     

    • Nissan Motor Co. said it reduced output at North American plants late last week, with production resuming this week.

     

    In Smyrna, Tenn., production of the Murano crossover was suspended, and weekend overtime to build the Rogue crossover, Maxima sedan and Leaf electric hatchback was canceled. Nissan also idled the Altima sedan line at the Canton, Miss., plant and cut weekend overtime for the NV van.

    In Aguascalientes, Mexico, output of Nissan's Versa subcompact sedan and Kicks compact crossover also were halted until Tuesday, March 23.

    "We continue to work closely with our supplier partners to assess the impact of supply chain issues and minimize disruption for vehicle deliveries to our dealers and customers," Nissan spokesman Brian Brockman said.

    The impact has been widespread, but not universal. Hyundai Motor America said that its plant in Montgomery, Ala., so far is operating normally.

    "We continue to collaborate with our supplier partners, and so far we have been able to maintain a high level of production," said Randy Parker, senior vice president of sales.

    Kia Motors America also said its Georgia plant, which makes the popular Telluride crossover, was staying the course.

    "We are still maintaining normal operations. Watching it very closely still but have avoided any impact so far," Kia Motors Manufacturing Georgia said in an email.

    Douglas A. Bolduc, Urvaksh Karkaria, Hannah Lutz, Michael Martinez and Larry P. Vellequette contributed to this report.

    RECOMMENDED FOR YOU
    Ford cuts F-150 output for 2 more weeks amid chip shortage
    Recommended for You
     Ford cuts F-150 output for 2 more weeks amid chip shortage
    Ford cuts F-150 output for 2 more weeks amid chip shortage
    GM extends shutdown at Ontario Equinox plant due to chip shortage
    GM extends shutdown at Ontario Equinox plant due to chip shortage
    The latest numbers on the microchip shortage: Ford hit hard
    The latest numbers on the microchip shortage: Ford hit hard
    Digital Edition
    View latest issue
    See our archive
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up today for our Weekly Newsletter, Daily Newsletter and Breaking News Alerts. We'll deliver the news you need to know straight to your inbox.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Subscribe Now

    An Automotive News Canada subscription includes 12 monthly issues – delivered in print to your doorstep, and digitally to your inbox – plus unlimited, 24/7 access to our website.

    Subscribe Now
    Connect With Us
    • Facebook
    • Twitter
    • Instagram

    Our Mission

    The Automotive News Canada mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in Canada.

    Contact Us

    PO Box 243
    Station A
    Windsor, ON
    N9A 6K7

    1-877-812-1257

    Email Us

    ISSN 2475-5001 (print)
    ISSN 2475-501X (online)

    Resources
    • About us
    • Contact Us
    • Digital Edition Archive
    • Advertise with Us
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Canada
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • News
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Fiat Chrysler
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Lancia
          • Maserati
          • Ram
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
        • Honda
          • Acura
        • Hyundai
          • Kia
        • Mazda
        • Mitsubishi
        • Nissan
          • Infiniti
        • Subaru
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
        • Volvo
      • Auto Shows
        • Toronto Auto Show
      • Photo Galleries
      • Automakers
      • Suppliers
      • Retail
      • Dealer Best Practices
      • Government Relations
      • Trade and Tariffs
      • Technology
      • Labour
    • Opinion
      • Blogs
    • Canada Conversations
    • EVENTS & AWARDS
      • 2019 Canadians To Watch
      • 2019 Auto News Canada All Stars
      • Best Dealership To Work For
      • Register for the 2021 Best Dealership To Work For
      • Canada Congress Conversations
      • Retail Forum: Dealer Discussions
      • Leading Women Roundtables
    • Jobs & Classifieds
    • +MORE
      • NEWSLETTERS
      • SUBSCRIBE
      • CLASSIFIEDS
      • PEOPLE ON THE MOVE
      • COMPANIES ON THE MOVE
      • WEBINARS
      • ADVERTISE WITH US
      • CONTACT US
      • DIGITAL EDITION