Ford and GM are closing factories while the automotive industry’s problems continue

GRAND RAPIDS, Mich. (WOOD) – It’s a tough time for the automotive industry.

Ford and General Motors announced Thursday that they will temporarily halt production at two factories in Michigan due to a shortage of spare parts. Ford is temporarily closing its Flat Rock plant while GM stops production at the Lansing plant.

In a statement to News 8, GM said, “due to a temporary shortage of parts, production at the Lansing Grand River assembly will be canceled during the week of April 4. Production is scheduled to resume on Monday, April 11.”

GM told WLNSNews 8’s Lansing sister station, the shutdown is not due to semiconductors or Russia’s war with Ukraine, but that does not mean which part of the plant is missing.

This is not the first time that any of the companies have had to pause production in the past year. The constant problems have caused car dealers – such as Betten Imports in the Grand Rapids area – to run out of stock.

David Kolean, Volkswagen’s sales manager for Betten Imports, said “every month it’s a roller coaster.”

“You go from having a few cars to no one to having a few,” he said. “It’s just up and down.”

Betten Imports relies on a factory in Chattanooga, Tennessee for the Volkswagen Atlas. It has been shut down several times, most recently for over a month.

“It’s important because Atlas represents almost half of our sales,” Kolean said.

Mike Wall analyzes the automotive industry for S&P Global Inc.

“All you have to do is go to a dealer and it’s pretty sparse,” Wall said. “You have more used vehicles at the forefront, and maybe a splash of new vehicles if you’m lucky.”

This is not a new problem. Plants have been shutting down at intervals for several months, which has put a lot of stress on dealers. The problems are expected to continue.

“We’re talking a good bit into 2023 – or, I dare say, maybe even a little bit later – before we really see inventories improve significantly,” Wall said.

A global shortage of microchips is partly to blame.

“The average car has 2,000 to 3,000 microchips,” Kolean explained. “It’s an essential part of the vehicle. Without them, we can not have seat heating and much more. A car drives on it all.”

That’s a problem that Wall said continues to plague the industry despite “sequential improvement.” Wall said the number of chips per. vehicle has doubled from 2017.

“Our biggest single challenge right now in North America remains the semi-conductor and then the broader supply chain,” he said. “It’s not just a Ford problem, it’s not just a GM problem, it really transcends all automakers.”

But that is far from the only problem.

“It’s exacerbated by a shortage of workers, a shortage of components, transport problems, getting things to arrive on time,” Kolean explained. “It’s the perfect storm.”

Although the plants reopen quickly, Wall said the damage could be permanent.

“When those plants go down that way, especially at the semiconductor level, you lose the job in process inventory that you’re working on right at that very moment,” he explained. “The ripple effects are starting to work through the industry.”

He said the recent earthquake in Fukushima, Japan, affected a microchip manufacturer there.

“They had three plants that were affected,” he said. “Even though (they) came back online after only a few days of being down when they assessed the situation, the ripple effects are starting to work through the industry again.”

It’s also “very hard” to get a new vehicle right now, Wall said.

“Even ordering vehicles now is a challenge depending on the automaker,” he said. “In some cases, some automakers put the pause button on orders, even custom orders.”

If you want a car right now, Wall said, do your research, be flexible with which vehicle you want, and even be prepared to drive out of state to get it.

“This could have been more extreme options in the past,” Wall said. “But we’re in extreme territory when it comes to vehicle availability.”

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