"As the companies slow down or cease production"
So are you talking about a domestic production company or an overseas production facility? It matters.
You don't seem to make any distinction between domestic production and offshored production....
So are you talking about a domestic production company or an overseas production facility? It matters.
You don't seem to make any distinction between domestic production and offshored production....
We live in a world economy with far flung supply chain and economic connections - that is intrinsic to the risks we face.
Production of sophisticated finished goods for domestic manufacturers depends on on a steady and reliable supply of critical components from all over the world. China, India, Mexico, Pakistan, Malaysia, Taiwan, Bangladesh, Vietnam, Pakistan, Siri Lanka, Japan, South America, the EU and every place else in between- you name it.
A lot of stuff sourced from China has it's own little sub supply chain that wends it way through any one of a number of unstable, unreliable third world shit holes as the unscrupulous Chinese vendors try to find the cheapest subcontractors.
Due to what was once very efficient, low cost shipping it's not uncommon for Work In Progress components from Chinese vendors to start in in one place in Bangladesh, Pakistan, Cambodia and Vietnam, transit to other counties for integration or other multiple value added steps before they are shipped to China for finishing and distribution to the US.
An obvious and unambiguous example is the thousands of Ford and GM cars and trucks sitting in yards waiting for critical microprocessor controls that are supplied by overseas vendors who cannot deliver due to supply chain dislocations.
Critical components are in tight supply which restricts production and the unavailability of a single critical component can shut down production entirely. It's really hard for a company with thousands of employees to make payroll when they are operating at half capacity and facing and economic downturn due to Biden inflicted consumer financial exhaustion.
At some point, even GM and Ford have to shut down factories and lay off workers as unsold inventory piles up. Laid off workers either cannot buy new cars and trucks or will delay the purchase due to the threat of economic hard ship. That means all those Fords and Chevys, some produced a high price premium due to shortages and inflation, are are going to have a hard time moving off the dealer lots. When they do get sold, they may not sell for a profit.
So GM and Ford cut orders to the foreign and domestic control manufacturers who in turn, cut their orders the Taiwanese microprocessor makers who are burning money trying to ramp up their production and deal with their complex supply network.
It becomes a self reinforcing cycle of negative feedback
This is playing out at ALL levels of the inter connected and inter dependent world economy.
It's real - and it's getting worse - not better under Biden's reign of across the board economic self destruction.