July 30, 2021

Gp Delivers1

The excellent automotive artisans1

Shortages of microchips, seat foam, more halts auto production

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.