Posted on 07/23/2021 5:13:01 PM PDT by george76
Have you heard the one about the dead cars? No, not the ones we find in junkyards, but the ones that haven’t had life yet, thanks to the chip shortage.
These so-called “dead” cars are vehicles that have rolled off the assembly line, otherwise ready for sale, sitting in fields or on lots near the factories that produced them, just waiting for chips
The New York Times even recently recounted an anecdote from a dealer principal who took a pilgrimage to a Ford factory to see all the “dead” cars for himself.
We weren’t able to pin down a reliable estimate on how many dead cars there are sitting outside of factories, but we’re going to guess the number is a lot.
And that number is set to grow, as GM announced that plants in Indiana, Michigan, and Mexico that produce the Chevrolet Silverado and GMC Sierra will halt next week, thanks to, you guessed it, the chip shortage.
GM had so far avoided chip-related shutdowns by skipping some features, and by … building some trucks and adding the chips in later. See how that “dead” car anecdote links to today’s news story?
Of course, halting production is a step beyond finishing vehicles and letting them sit until the chip cavalry arrives.
“The global semiconductor shortage remains complex and very fluid, but GM’s global purchasing and supply chain, engineering and manufacturing teams continue to find creative solutions and make strides working with the supply base to minimize the impact to our highest-demand and capacity-constrained vehicles, including full-size trucks and SUVs for our customers,” the company said in a statement.
Leaving vehicles partially finished and cutting out certain features are just two solutions for automakers struggling through an unusual time.
——————————————YES——————————————
Back in the’80s I was on it and there was a traffic jam. I was at the top, got out to stretch my legs and looked down...
YEAH; but it’s a damn short bed, only interested in long beds!
My wife has been waiting over a year (YES, OVER 1 YEAR) for a stupid chip for her 2010 Ford Explorer, how can a 2010 vehicle of any make or model wait this long for what should have been a simple replacement part!
And here I would gladly go back to my old INTERNATIONAL HARVESTER CARRYALL, it didn’t have any of that crap, but when you locked the hubs it would climb a pine tree.
It was built like a tank.
Locking hubs is another thing I never want to go back to. Or a transfer case with the shifter on the floor. I love my push button four wheel drive and auto locking hubs.
They don't really know what happened but those guard rails are very low. She got a front wheel up on one of them and slipped between the cables.
Very frightening.
Ditto for the Subaru dealership in my town
IRT post 21. I learned how to drive with a Rambler 3 on the tree. By the time my parents acquired it, it needed a quart of oil with every fill up.
Seems like it should work, right? Let me count the ways people in business can delude themselves when they think the gravy trail might spring a leak...oh it’s an uncountable infinity of rationalization, never mind...I’m not a specialist, but I have a decent handle on how SQA and SRE play out in real life anti-patterns...
I suspect there are a lot of factors quashing the viable alternatives for the moment. Else these stories wouldn’t show up in the news.
In this case SQA doesn’t create product to measure, heheh. And efficiency of JIT-style supply chain matters little when there’s no product to source. Giant chip fabs producing 99.99% of the product monopolized the market because the economy of scaling up and scaling down is remorseless in chip production. Everyone conformed to their suppliers lead time requirements to gain that last fractional penny of margin. But the forecast missed and the orders stopped. Now there’s demand there’s nothing in the pipeline and no one who could afford to compete to really pick up the slack. By the time another fab scaled up production to meet demand the big guys would have turned around and undercut the investment.
In the mean time, the needed chips might turn up, so there’s no reason to stop manufacturing DOA pickup trucks...
I think they’re fabless, so they’re using some other fab's production capacity. This is a hedge, and it drives up the cost a hair. But it will assure some vehicle production to meet demand. I’m sure GM has product to sell too. They didn’t cancel all chip orders. This is more of a synchronization issue really. I suspect they produced the DOA vehicles thinking more chips would eventually show up. At a deeper take, it might be more expensive to idle production now.
It was.
Oh it was.
Actually was just at a 90% empty Honda dealer. They are in chip negative starvation just like the rest and Toyota across the street was empty as well.
Yes, they don’t have inventory - was pointing out that Toyota and Honda are still getting orders in, just at a much reduced rate. A friend of mine just received the new Toyota 4Runner TRD Pro they ordered a couple months ago.
Denso, which is in tight orbit of Toyota, does actually have their own fabs in Japan. Toyota themselves have a fab too - this last was an outgrowth of the project that resulted in the Prius: https://www.semi.org/en/blogs/technology-trends/automotive-chip-manufacturing-in-japan-drives-innovation
Toyota is still being hurt by the industry wide shortage, but they can still make stuff at a lower rate on their own internal and close-associate resources.
I had forgotten that Honda was more dependent on Renesas, which had a bad fire at their main Japanese fab: https://www.wsj.com/articles/renesas-chip-plant-fire-spreads-concerns-about-global-auto-production-11616414181
I had also thought that Honda was still getting supplied by Hitachi, but it turns out Hitachi sold off the fab for that.
Back during obama’s reign, he ordered all federal agencies to buy up millions of round of ammo to keep them off the market. He also came up with cash for clunkers, intentionally destroying engines of used cars FORCING car buyers to go new.
Since this is his third term, I would bet that he has ordered all federal agencies to buy up all the computer chips to again FORCE the American car buyers to go electric.
Makes sense to me. He likes to use force.
The GMC dealer in my town used to have a full lot of fleet vehicles in the back. Today it is empty. NONE.
I don’t see any new cars on the dealer lots. It is mostly a few used cars parked parallel to the roadway in the first row. Reports I’ve seen suggest new cars are currently down from the same time last year.
But....... it’s a Chevy. The antiAmerican UAW built it
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