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Transportation Hardware

GM Suspends Production At North American Plants Amid Ongoing Chip Shortages (engadget.com) 84

Posted by BeauHD from the supply-and-demand dept.
Starting on Monday, General Motors will temporarily halt production at all but four of its North American factories due to chip supply constraints. Engadget reports: The halt in production will affect many of the automaker's most profitable vehicles, including the Chevy Silverado and GMC Sierra. "During the downtime, we will repair and ship unfinished vehicles from many impacted plants, including Fort Wayne and Silao, to dealers to help meet the strong customer demand for our products," a spokesperson for GM told the Detroit Free Press. "Although the situation remains complex and very fluid, we remain confident in our team's ability to continue finding creative solutions to minimize the impact on our highest-demand and capacity-constrained vehicles."
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GM Suspends Production At North American Plants Amid Ongoing Chip Shortages More

GM Suspends Production At North American Plants Amid Ongoing Chip Shortages

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  • What? (Score:5, Insightful)

    by Chris453 ( 1092253 ) on Thursday September 02, 2021 @06:51PM (#61758103)

    "ship unfinished vehicles from many impacted plants, including Fort Wayne and Silao, to dealers to help meet the strong customer demand for our products"

    I didn't realize there was such a strong demand for unfinished vehicles. What could be the use for these? Lawn ornaments in Alabama or homes in California?

    • Re:What? (Score:5, Informative)

      by timeOday ( 582209 ) on Thursday September 02, 2021 @07:02PM (#61758131)
      Sounds like they may be going ahead with this plan from a couple months ago:

      Ford Motor Co. could start shipping unchipped vehicles to dealers around the country, sometime this year - vehicles that cannot be sold to consumers immediately but something to fill dealer lots that are growing barer by the day, the automaker told the Free Press on Monday.

      When back-ordered semiconductor chips become available, Ford dealers would then insert them into components in cars that customers have selected and send them home immediately and eliminate an additional wait related to post-parts shipping.

      • Re:What? (Score:4, Interesting)

        by Kernel Kurtz ( 182424 ) on Thursday September 02, 2021 @08:01PM (#61758289)

        Sounds like they may be going ahead with this plan from a couple months ago:

        Ford Motor Co. could start shipping unchipped vehicles to dealers around the country, sometime this year - vehicles that cannot be sold to consumers immediately but something to fill dealer lots that are growing barer by the day, the automaker told the Free Press on Monday.

        When back-ordered semiconductor chips become available, Ford dealers would then insert them into components in cars that customers have selected and send them home immediately and eliminate an additional wait related to post-parts shipping.

        In fact many of those vehicles can be sold to owners immediately with some optional equipment disabled, knowing that when the shortage ends the missing options can and will be retrofitted without issue or cost.

    • You trimmed off the key word.

      "repair and ship unfinished vehicles" they're fixing the vehicles that didn't pass quality control now, and shipping those out, instead of doing it at the end of the model's production run.

    • Re: (Score:1)

      by Anonymous Coward
      How can you tell a rich good ol' boy? He's got TWO cars up on blocks in the front yard.

    • Re: (Score:3)

      by AmiMoJo ( 196126 )

      Depends what is missing. If it's say the telematics module then the customer could use the vehicle while waiting for one to be delivered and fitted by the dealer at a later date.

      Even if it's not driveable it might still be worth delivering while waiting for a part because the dealer has other work to do on it. Fixing damage from shipping, cleaning the car, applying any software updates etc. Also means it's not sitting in a field somewhere taking up space at the GM factory.

      • Depends what is missing. If it's say the telematics module then the customer could use the vehicle while waiting for one to be delivered and fitted by the dealer at a later date.

        I work in the industry. This sort of thing is happening. The vehicles are drivable, but missing certain features. The customer is sold the vehicle with an IOU to install the features when they become available.

        How bad do you need a new vehicle right now?

        • Re: (Score:2)

          by AmiMoJo ( 196126 )

          Around here used cars sometimes sell for more than new ones, simply because they are available now. So apparently some people really need a new vehicle right now.

        • Demand (Score:2)

          by JBMcB ( 73720 )

          My family works in the automotive industry, and I work in an adjacent industry.

          The demand for new pickup trucks is *high* I know a dealership that got a shipment of five in, and someone called in that day and bought all of them over the phone. Contract work is through the roof, and contract shops can't hire enough people or buy enough pickup trucks to put them in.

          • The demand for new pickup trucks is *high* ...

            Your average person can get by without buying a new car right now. However, people that use their vehicle for work, NEED that vehicle. A lot of the "unfinished" vehicles are commercial vehicles. It just needs to get the job done. They can get the infotainment system installed once one is available.

  • Ford Too (Score:5, Informative)

    by phalse phace ( 454635 ) on Thursday September 02, 2021 @07:02PM (#61758133)

    GM isn't the only one.

    Ford announced yesterday that they were going to trim production again [reuters.com], one week after they announced further production cuts [cnbc.com].

    I don't think there was one made in July, otherwise Ford would have made 8 consecutive monthly production cut announcements

    Ford's prior announcements:

    February 2021 [usnews.com]
    March 2021 [cnbc.com]
    April 2021 [reuters.com]
    May 2021 [detroitnews.com]
    June 2021 [freep.com]

  • outsourced (Score:3)

    by sdinfoserv ( 1793266 ) on Thursday September 02, 2021 @08:01PM (#61758285)
    Gee, send all manufacturing out of the country and get surprised when something happens to the supply chain.
    • The only manufacturing that matters in this case is of the chips themselves which happens predominantly in Asia and Taiwan specifically. It doesn't matter where the rest of the car is manufactured. A plant in the US wouldn't have any better access to chips than a plant in Mexico.

    • Re:outsourced (Score:5, Informative)

      by phalse phace ( 454635 ) on Thursday September 02, 2021 @11:00PM (#61758503)

      Gee, send all manufacturing out of the country and get surprised when something happens to the supply chain.

      Not every chip that goes into an automobile comes from outside the U.S.

      Infineon, NXP Semiconductors, Samsung, and Texas Instruments all have fabs in Texas that produce chips for auto makers, but the Texas winter storm that caused power outages forced them to shut down [wsj.com]. That added to the problem.

      Probably the biggest bottleneck may be with Taiwan Semiconductor. They're prioritizing chip production for smartphones, computers, servers, and other electronics since those sectors drive the bulk of TSMC's revenues and profits -- Apple is TSMC's biggest customer, bringing in about 20% of TSMC's revenue. Chips for automakers only made up about 3% of TSMC's 2020 revenue, so they're low on TSMC's priority list.

    • Gee, send all manufacturing out of the country and get surprised when something happens to the supply chain.

      This has nothing to do with manufacturing outside of the country. This has do to with screwing over your suppliers, and your suppliers who have other customers too simply not giving a shit about you.

      It doesn't matter if a chip is coming from China or the USA. If you cancel all your orders due to COVID, you get bumped from the queue. If another customer is in the queue they get in early. If you suddenly decide COVID is over and your production facility is back up and you need chips now, well tough, at best w

  • The problem they are faced with now is a crunch because they are utilizing high-end chips in all their cars. I recognize that some computing is now required for car ECUs but those are nothing compared to the overpowered monstrosities they put in so-called "vehicle entertainment consoles". The radio used to be a nice feature you could live without but now the thing they replaced it with is mandatory in all models. Just stop putting sophisticated computers in cars and you will be fine.

    • If you read my comment and weren't quite sure then let me make it clear:
      GET OFF MY LAWN!

    • What they really mean by "chips" is mostly sensors not microprocessors. A typical car now-days has some 60-100 sensors, and unlike those horrendous infotainment systems, they are a good thing.
    • The primary reason for ECU is to increase gas mileage and safety. Basically, it is required to make the vehicle meet federal guidelines.

      • ECUs are great, though I wish they would reduce their program complexity. They should be a minimalistic as possible and offload anything that isn't 100% necessary for car operations to other components, which includes the dash display/configuration crap and non-vital sensors. I don't even think there is a reason to be running an RTOS on the ECU.

        • ECUs are great, though I wish they would reduce their program complexity.

          PCMs are just as complicated as they need to be in order to fulfill their missions. Back in the 1980s and early 1990s they typically had single-MHz microcontrollers in them and were very simple beasts, I could literally hear the different positions in my fuel map in my 240SX. But now they have all kinds of emissions concerns that they didn't have back then and the maps are much more complicated, so they need much more complicated PCMs.

          They should be a minimalistic as possible and offload anything that isn't 100% necessary for car operations to other components, which includes the dash display/configuration crap and non-vital sensors

          That's actually how it works right now. Only sensors actually on or relev

        • The programming is complex because it is needed to manage the engine to get the best emissions and fuel efficiency. It is all about regulations.

        • Re: (Score:2)

          by tlhIngan ( 30335 )

          ECUs are great, though I wish they would reduce their program complexity. They should be a minimalistic as possible and offload anything that isn't 100% necessary for car operations to other components, which includes the dash display/configuration crap and non-vital sensors. I don't even think there is a reason to be running an RTOS on the ECU.

          ECUs only handle the engine. The one handling th dash is another computer entirely.

          ECUs run an RTOS because an engine is a real time system - they control spark timi

  • Predictably it seems.

  • GM: the people that sent all pensioners "YOUR MEDICAL COVERAGE IS TERMINATED" notice, leaving out that it was just transferred to the UAW.

    Don't forget: the people that buy suburbans tout trading it in for a prius when the gas is high . . . math is hard.

    When chip shortages hit Subaru or Mazda (which they won't) you'll see what software-less vehicles with modern engineering look like . . . brand new, user repairable, mechanical automobiles? Yes, please.

    • You'd be amazed how many people don't know that fuel injection is possible without computers. Among many other things. I'm old enough to remember the 60's, if every component that goes into every sub-assembly was made right here in the USA there wouldn't be any of these problems. See: WW2. See also: electronics in the 50's and 60's. Kids today don't know that time was when a color TV was made in Chicago (and your family had enough money for it) and *all* of its internal parts were made in USA.

      • There might be 5 people in the US who can rebuild a Kugelfischer injection pump.
      • Well, let's not pine TOO much for the good-old days. Stamped parts still require wear-in :D

        We're in the 'race to the bottom' and people 'vote with their wallets' which means they take free over a nominal fee with much better experience. I'd prefer to pay to buy a video game just for the base level of filtering you get of the free-to-play masses.

      • You'd be amazed how many people don't know that fuel injection is possible without computers.

        I wouldn't either. But what's amazing to someone who knows something is how few mechanical fuel injection systems are worth two fucks, and how virtually all of them are diesel systems made by Bosch; Specifically, those with M, MW, and P pumps.

        However, there's just no way to meet modern emission target requirements with a system like that, so for all their other virtues they must be permitted to pass, at least in the main. This doesn't stop me from wanting to change my ISC 250 with CAPS over to the older, P-

  • Weird stuff in the economy (Score:5, Interesting)

    by RobinH ( 124750 ) on Thursday September 02, 2021 @10:07PM (#61758421) Homepage

    As someone who lived through the 2000 dot com bubble, there are a few similarities.

    First, there's the "irrational exuberance," meaning everyone has this idea that things that have gone up in value will keep going up and can never go down, even when they seem massively overvalued. I'm looking at you crypto, NFT, and auto company valued more than GM that makes far fewer vehicles. Hey, I love Tesla, but there's a limit to how much it should really be worth.

    Secondly (at least here in Canada) houses have run up in price so much as a percentage of average income, they're as high or higher than in the early 90's.

    Third, we've got inflation creeping up very quickly. This is being caused by supply crunches, and it's more than just semiconductors. Lots of things are just harder to find right now. It's also being caused by wages increasing due to a labour shortage. Now I'd normally say that wages going up is good, especially if it caught up with productivity gains, but wages going up is also a big inflation driver, and if wages go up as much as inflation, nobody benefits. Weirdly, because they changed the way they measure inflation in 2020 to account for changes to consumer habits during the pandemic, the actual inflation isn't really showing up in the "basket of goods" now that we're all back to buying typical stuff every day. So governments seem to be working on numbers that are undervaluing inflation, even though the average person can easily see the supply shortages and the high prices. Auto manufacturers are only building their highest margin vehicles (trucks) and even those lines are shutting down, and there are no incentives being offered at dealers. Tried to hire a contractor lately? Good luck! Inflation also causes companies to stock up on inventory...

    Which brings me to the fourth thing, in the automotive industry (where I work), weird things are going on. Even though production is way down due to the semiconductor shortage, the big 3 are still putting in higher and higher orders for the fall, causing them to order in more steel, etc., but then the big 3 are dropping out those orders when we get within 2 weeks of delivery. Tier 1 and tier 2 suppliers are sitting on more and more inventory. In fact the big 3 are sitting on lots of inventory of finished vehicles, except for some chips to install. Yet we know the semiconductor shortage will continue well into 2022. We also have the steel suppliers who seem to be doing everything they can to get all their stock off their floor (just anecdotal).

    So, what does increasing inflation get you? The central banks will raise interest rates to keep inflation in check. But what did a whole bunch of people do in response to (a) sitting a home staring at their walls and (b) increasing house values? They took out very low interest variable rate loans against their newly increased house values. They bought real estate to either rent out or for speculation, and those buyers are highly leveraged. What happens when interest rates go up? People who took out money against their home, well, they'll mostly keep paying their mortgage but they'll feel like they have no money to spend, and what will the speculators and highly leveraged landlords do? They'll sell, so housing prices will drop, and everyone who felt rich because of their house prices going up will stop feeling so rich. Once demand drops and everyone's sitting on lots of inventory, companies will start laying people off.

    And that is how you get a recession.

    Now, at the same time, I see the guy from "The Big Short", Michael Burry, is saying inflation is going to go up, and we're going to have a recession, and his investment group, Scion, is buying real assents [seekingalpha.com].

    TL;DR? Don't over-leverage yourself.

    • Part of the problem though is as prices rise, it becomes increasingly easier to over-leverage yourself (lots live paycheck to paycheck). You wouldn't think buying name brand bologna is over-leveraging until you have a 20% fuel hike. Incidental problems starting adding up until there is little to cut from anymore.

      But yeah, this is starting to feel ugly, and on a global scale over-leveraging seems a lot like musical chairs- as long as your country is the last standing, you win.

      I see a lot of western countrie

    • Comment removed based on user account deletion
      • wages don't keep up with inflation, that is the magic of central banking, "stimulating" the economy by transferring money from workers to corporations and government.

    • They bought real estate to either rent out or for speculation, and those buyers are highly leveraged. What happens when interest rates go up? People who took out money against their home, well, they'll mostly keep paying their mortgage but they'll feel like they have no money to spend, and what will the speculators and highly leveraged landlords do? They'll sell, so housing prices will drop, and everyone who felt rich because of their house prices going up will stop feeling so rich.

      Yup. A lot of us hav

      • Real estate is up everywhere but really overvalued right now in places like Florida.

        For sure. I'm in Florida myself, and the home that I've owned for less than two years has already appreciated by $100,000, or almost 50%. It had crossed my mind to unload this place and rent until things settle down. Rentals are out of hand also, but that's not likely to last anywhere near long enough to outweigh the benefit.

      • Re: (Score:2)

        by RobinH ( 124750 )
        Digging some more, this is a far bigger problem in Canada than in the US. The US housing market went down after 2008, but it didn't in Canada - it just continued to rise (there was no real financial crisis in Canada because the banks weren't deregulated to the same extent). My house in Canada has probably more than doubled in price since when we bought before 2008. It's a huge bubble. I'm measuring bubble as "housing prices vs. average income". That has always stayed in a certain range over time, and r

    • They took out very low interest variable rate loans against their newly increased house values.

      It's like people don't even remember 2008. No way in hell I'd get an ARM when rates are less than 4% as it is.

  • Don't depend on others for your parts? (Score:5, Insightful)

    by Hans Lehmann ( 571625 ) on Thursday September 02, 2021 @10:47PM (#61758479)
    There was a time when Detroit bragged about doing their own end-to-end manufacturing. Iron ore and sand was delivered on one side, steel fenders and glass windshields were sent out on the other side. Now, how many components in the average new car are built by outside vendors? You would think that the major auto manufacturers would consider building their own semiconductor fab lines if they really use that much in every car.

    • Re:Don't depend on others for your parts? (Score:4, Interesting)

      by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Friday September 03, 2021 @09:34AM (#61759265) Homepage Journal

      There was a time when Detroit bragged about doing their own end-to-end manufacturing. Iron ore and sand was delivered on one side, steel fenders and glass windshields were sent out on the other side. Now, how many components in the average new car are built by outside vendors?

      Basically all of them. The automaker makes the body, frame if any, any big metal structural parts, and maybe some of the plastics; they typically but don't always make the engine, most automakers buy all their transmissions and only a few actually make any (Ford and GM notably make most of their own transmissions, as does Mercedes) and so on. Some make wheels, some contract that out too. Most make their own axles, but not CV shafts.

    • There was a time when Detroit bragged about doing their own end-to-end manufacturing. Iron ore and sand was delivered on one side, steel fenders and glass windshields were sent out on the other side.

      IIRC, Henry Ford was famous for this. Ford even owned a rubber tree plantation so he could grow his own raw latex.

      You would think that the major auto manufacturers would consider building their own semiconductor fab lines if they really use that much in every car.

      That's the classic "build vs. buy" decision you learn about in Introduction to Finance. A fab costs in the hundreds of millions to billions of dollars. A typical car might have a few hundred chips of all sorts of types (and not necessarily coming from the same production line). GM needs a few million oxygen sensors a year. That's not near enough to keep an entire production line busy. It's much

    • There's a reason for outsourcing to a specialist. A car is complex, and has gotten more and more complex. That complexity requires specialist manufacturers with a competence that goes beyond just how to build a car. Sure a car company could employ that expertise and invest in a fab, but I don't think they will sell very many cars at double the price of the competition who don't have such an investment thanks to the economies of scale that come from an external specialist supplier to a far larger industry.

      In

  • Comment removed based on user account deletion

  • Someday there will be... (Score:3)

    by tiqui ( 1024021 ) on Friday September 03, 2021 @01:03AM (#61758639)

    a responsible board of directors somewhere that will decide that executive pay and benefits should be tied to LONG TERM company health, and they'll fire anybody who has ever supported "just in time" manufacturing, and/or outsourcing.

    A man can dream...

    • a responsible board of directors somewhere that will decide that executive pay and benefits should be tied to LONG TERM company health, and they'll fire anybody who has ever supported "just in time" manufacturing, and/or outsourcing.

      I don't know. Those strategies have been profitable for 30 years now. Even a board of directors that strongly favored long term profits wouldn't change those strategies because of a once in a century phenomenon.

      Reduced investment in R&D, and short term layoffs to hit quarterly targets are the real problems IMHO.

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