Semiconductor shortage impacts Big Three automakers

Shortage estimated to have cost each automaker $2 billion

Automakers hit hard by computer chip shortage; fix could take months

DETROIT – The coronavirus pandemic helped cause the automotive semiconductor shortage. The scarcity is lasting as long as the pandemic has and is almost as expensive.

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It’s becoming a weekly wrangle trying to figure out which auto plants will have to close because of the chip shortage. The Dearborn Assembly plant is still building Ford F-150s, which are filling up the parking lots, but they can’t sell them yet as the automaker waits for the computer chips needed to make them fully functional.

READ: Ford to cut back F-150 production due to chip shortage

“They’re still cutting production, they’re cutting shifts, cutting overtime shifts and closing plants for weeks at a time because they don’t have anywhere to put the parts,” said analyst Sam Abuelsamid.

Stellantis -- formerly Fiat Chrysler -- will halt production at five North American plants, including its Warren truck plant on Mound Road.

General Motors is pausing manufacturing at two of its plants, including its Lansing plant. Other plants -- one in Canada and two Korean plants -- will also be impacted.

Ford Motor Company’s Chicago, Flat Rock, Kansas City and Ohio plants are impacted.

Autotrader analyst Michelle Krebs said Ford ended up hit the hardest.

“They’ve idled more F-150 production and Super Duty production and Super Duties are in very low supply,” Krebs said. “So that starts to hurt and those vehicles that generate a lot of cash.”

The auto CEOs held a Zoom meeting with President Joe Biden who agreed to spend government money to help increase domestic chip production.

The estimate of the cost to the automakers is about $2 billion each, but the real problem is that analysts first thought the semiconductor shortage would have ended in summer and current estimates believe it can go into 2022.

About the Authors:

Rod Meloni is an Emmy Award-winning Business Editor on Local 4 News and a Certified Financial Planner™ Professional.

Dane is a producer and media enthusiast. He previously worked freelance video production and writing jobs in Michigan, Georgia and Massachusetts. Dane graduated from the Specs Howard School of Media Arts.