Stellantis said on Friday it will halt production at five North American plants next week because of the global microchip shortage.

TheConquerorWorm

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From the Guardian (This also is supported by other articles that I have read):

“Car manufacturers, who cut chip orders as vehcle sales fell last year, found themselves at the back of the queue when they tried to reorder when the market rebounded. The entire global car industry buys about $37bn worth of chips, with the biggest players such as Toyota and Volkswagen spending more than $4bn each, making them relative minnows for semiconductor suppliers.”

while the shortage is global and cuts across all industries, it seems that “big three” car makers had an opportunity to buy chips last spring but decided to CUT their orders rather than inventory any chips.

I have also read that the car industry is “disconnected” from the reality of the chip business. Car companies think of themselves culturally as “big” and want to extract very favorable terms from their suppliers, including chip manufacturers. The chip companies are becoming increasing “unhappy” with the car industry and their demands given how “few” chips that they buy.

What the car companies don’t understand is that chips are not alternators and they are a ‘minnow” in the global chip market. This ISN’T the auto parts market. Until the big 3 and other car makers realize that the global volume of chip orders that they place is so small (they have no “stroke”) they may once again face supply issues when the next supply crunch occurs.
 

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From the Guardian (This also is supported by other articles that I have read):

“Car manufacturers, who cut chip orders as vehcle sales fell last year, found themselves at the back of the queue when they tried to reorder when the market rebounded. The entire global car industry buys about $37bn worth of chips, with the biggest players such as Toyota and Volkswagen spending more than $4bn each, making them relative minnows for semiconductor suppliers.”

while the shortage is global and cuts across all industries, it seems that “big three” car makers had an opportunity to buy chips last spring but decided to CUT their orders rather than inventory any chips.

I have also read that the car industry is “disconnected” from the reality of the chip business. Car companies think of themselves culturally as “big” and want to extract very favorable terms from their suppliers, including chip manufacturers. The chip companies are becoming increasing “unhappy” with the car industry and their demands given how “few” chips that they buy.

What the car companies don’t understand is that chips are not alternators and they are a ‘minnow” in the global chip market. This ISN’T the auto parts market. Until the big 3 and other car makers realize that the global volume of chip orders that they place is so small (they have no “stroke”) they may once again face supply issues when the next supply crunch occurs.
With the exception of Tesla, the automotive industry in general is disconnected from the tech industry. I work for a tech company in the valley and work with GM and Ford. Ford is very backwards in many of their tech ventures (though they are coming around). GM thinks they can do everything in house. Their devs are the most arrogant SOBs I’ve seen in the industry and frankly, they aren’t that great. The only exception are the guys at Cruise. They are very forward thinking. Oh the stories I could tell you about GMs CTO.
 

FLjeeper

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With the exception of Tesla, the automotive industry in general is disconnected from the tech industry. I work for a tech company in the valley and work with GM and Ford. Ford is very backwards in many of their tech ventures (though they are coming around). GM thinks they can do everything in house. Their devs are the most arrogant SOBs I’ve seen in the industry and frankly, they aren’t that great. The only exception are the guys at Cruise. They are very forward thinking. Oh the stories I could tell you about GMs CTO.
I agree with you on this one. Far disconnected from the tech industry. That’s why every 6 start cycles you have backup camera lines appearing and disappearing and they cannot seem to find the fix for it.
 

four low

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The lack of foresight in the automakers ordering, coupled with the
" Just in Time " fantasy of ordering parts, rather than having stock on shelves, has bitten them Big Time. Their "Too Big to Fail " self- image just took a big hit. Gotta love Karma...
 

Creeker

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Always thought the automotive supply philosophy of just-in-time (JIT) often turned into almost-in-time (AIT).
Looks as if the chip supply problem is not-even-close-in-time (NECIT).

Have to love folks who sit and look at spreadsheets, make assumptions, then make decisions, but have no clue to what they are doing...
 

Goin2drt

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Car manufacturers are pricks and they have been allowed to be pricks for years because they are such huge customers. They do not partner at all with a supplier they just make the demands. If you can’t meet their demands they will just go somewhere else. They do not want to hold any inventory and expect suppliers to hold it and be just in time.

Honestly I find it kind of funny and good for the chip manufacturers. Take care of your best customers and if these car manufacturers want to continue to be pricks then they will see it’s going to hurt them.
 

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Pacifica also impacted. Anything connected to the Texas refineries is about to get really scarce too. I don't see how that doesn't impact Wrangler.
 

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