Ford closes German plant for 1 month as global chip crisis worsens

https://edition.cnn.com/2021/01/18/business/ford-auto-chip-shortage/index.html

by nedsma • 6 years ago

21 8 6 years ago

edition.cnn.com

Scoundreller• 6 years ago

I still think this is more about lack of demand and trying to blame something else.

Blaming a “chip shortage” is too vague. Which one is there a shortage of?

Which automaker wrote contracts that didn’t guarantee part availability above other buyers?

Last I heard, in auto, if you’re a few hours late on a parts delivery you’re heavily penalized and the line risks being shutdown.

jjeaff• 6 years ago

I suppose it makes sense if we assume that the chip shortage has caused chips to become too expensive for the already depressed demand - thus making the economics of keeping a plant open untenable.

bsder• 6 years ago

Last I heard, in auto, if you’re a few hours late on a parts delivery you’re heavily penalized and the line risks being shutdown.

Maybe, but I suspect outsourcing to distributors is to blame. The automakers almost certainly outsourced the inventory risk and nobody is holding inventory anywhere.

If the automaker is the only customer having a parts problem, then the distributor has risk because a penalty by the automaker will absorb their profit from other customers.

If every customer is having a parts problem, the distributor can just laugh and say "Penalize us and we'll drop you and maybe declare bankruptcy. Have fun getting a new distributor in this mess after you penalize us."

Welcome to Always Late (aka Just In Time) Inventory.

FractalParadigm• 6 years ago

I used to work at a company that primarily hauled for an automaker, as one of these "sequence" drivers myself. It can be as little as 15 minutes late and you're causing down time, and without a really good reason, the fines are astronomical; I've heard ballpark figures around $8-12,000 per minute (from reputable sources, but could never personally verify).

For what it's worth, the company that assembles the dashboards for these vehicles started causing a lot of downtime, to the tune of 30-45 minutes in many cases, starting around August. "They simply can't get the parts" - I feel like this article is the explanation why.

LatteLazy• 6 years ago

Once again, chip production becomes a strategic problem...

jbverschoor• 6 years ago

Just like "programming mistakes", oh wait, those were requirements set by mgmt

mensetmanusman• 6 years ago

On one hand, winner takes all helps the winner get amazingly good at what they do to further humanity’s technological progress.

On the other hand, everyone starts to feel less in control of their destiny when even the largest corporations are powerless against supply fluctuations.

I believe it is a good thing though in the long run. A world power that knows it needs the entire world to continue prosperity is one that is less likely to blow up the world...

ApolloFortyNine• 6 years ago

The US automaker said it would idle its factory in Saarlouis, Germany, from Monday until February 19 because of the chip shortage and weak demand.

Can't help but feel like "weak demand" is just as big an issue here. Car sales dropped 15% last year.

Ford closes German plant for 1 month as global chip crisis worsens

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