GRAND RAPIDS, Mich. (WOOD) — It’s a tough time for the auto industry.
Ford and General Motors announced Thursday they will temporarily halt production at two Michigan plants due to parts shortages. Ford is temporarily closing its facility in Flat Rock, while GM is stopping production at its Lansing plant.
In a statement to News 8, GM said, “due to a temporary part shortage, production at Lansing Grand River assembly will be canceled for 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 because of semiconductors or Russia’s war with Ukraine, but it would not say which part the facility is short of.
This isn’t the first time either company has had to pause production in the past year. The continual issues have car dealerships — like Betten Imports in the Grand Rapids area — running low on inventory.
David Kolean, the Volkswagen Sales Manager for Betten Imports, said “every month it’s a rollercoaster.”
“You go from having a few cars to none to having a few,” he said. “It’s just up and down.”
Betten Imports connected on a plant in Chattanooga, Tennessee for the Volkswagen Atlas. It’s been shut down several times, most recently for over a month.
“It’s significant because Atlas represents almost half our sales,” Kolean said.
Mike Wall analyzes the automotive industry for S&P Global Inc.
“All you have to do is go to a dealership and it’s pretty sparse,” Wall said. “You’ve got several used vehicles at the forefront, and maybe a spattering of new vehicles, if you’re lucky.”
This isn’t a new issue. Plants have shut down intermittently for months, putting a lot of stress on dealerships. The problems are expected to continue.
“We’re talking well into 2023 — or, dare I say, maybe even a little bit later — before we really see inventories improve significantly,” Wall said.
A global microchip shortage is partly to blame.
“The average car has 2,000 to 3,000 microchips,” Kolean explained. “That’s a significant part of the vehicle. Without them, we can’t have heated seats and a lot more. A car runs on all of it.”
It’s an issue Wall said continues to nag the industry despite “sequential improvement.” Wall said the number of chips per vehicle has doubled from 2017.
“Our single biggest challenge right now in North America remains semiconductor and then the broader supply chain,” he said. “It’s not just a Ford issue, it’s not just a GM issue, it really does transcend all auto makers.”
But it’s far from the only problem.
“It’s compounded by worker shortages, component shortages, transportation issues of getting things to arrive on time as well,” Kolean explained. “It’s the perfect storm.”
Even if the plants reopen quickly, Wall said the damage can be lasting.
“When those plants go down like that, especially on a semiconductor level, you lose that work in process inventory you’re working on at that very moment in time,” he explained. “That ripple effect starts working its way through the industry.”
He said the recent earthquake in Fukushima, Japan affected a microchip manufacturer there.
“They had three plants that were impacted,” he said. “Even though (they) came back online after only a few days of being down as they assessed the situation, again that ripple effect starts working its way through the industry.”
It’s also “very tough” 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 are putting the pause button on orders, even custom orders.”
If you want a car right now, Wall said do your research, be flexible with what vehicle you want and even be prepared to drive out of state to get it.
“These might have been more extreme options in the past,” Wall said. “But we’re in extreme territory when it comes to vehicle availability.”