Having worked in the auto industry I can say this is the sort of thing was never, ever expected from a supply shortage. The frailty of the global supply chain network has been brutally exposed these last 14 months.
> The frailty of the global supply chain network has been brutally exposed these last 14 months.
I think it’s the exact opposite, supply chains have held up remarkably well. If I had believed some people here we would have been eating each other by now but apart from a shortfall in toilet paper things have been fine.
There were some shortages in Belgium that I didn’t expect. Like frozen broccoli missing everywhere for a week or two. Flour went missing for a month, probably due to panic buying. But otherwise, I enjoy fresh fruits, vegetables, and nuts which are definitely imported from somewhere.
I think that I agree. I think the frailty of people, not supply chains, have been exposed. Oh man, you might have to keep your three year old car or two year old phone an extra year. Oh the humanity!
Probably there is no semiconductor shortage. You can still order promptly many advanced electronics that use similar parts quickly, GPUs notwithstanding.
Something happened to the people in China who take 10-100 electronic parts manufactured there and turn them into 1, to deliver to assembly in the auto’s destination for the purposes of tariffs (by reducing the count of imported parts from 100 to 1). Because of the weird mechanics of manufacturing origin, which definitely affects how cars and networking equipment have to be made, this is my hypothesis for why we’re only hearing about these issues from a very narrow set of industries and not others.
In terms of what could have happened my bet is it’s going to be pretty horrible.
When you expect your materials to arrive daily for that days production and keep almost zero inventory and relying on "Just in Time Delivery", then cancel all your orders overnight and then expect them to start again on whim, on the day you decide without any heads up to your suppliers...what could possibly go wrong? Can you imagine if Apple behaved this way? If iPhone sales drop one quarter, cancelling all their chip production until sales picked up again?
Auto manufactures are spoiled, they get anything they want whenever they want from the Government every time they start crying. Whether it's multi billion dollar tax breaks (Ford, Oakville, GM Oshawa, etc), multi billion dollar Gov programs (cash for clunkers) at the tax payers expense or being allowed to screw their suppliers for billions through bankruptcy (GM).
Don't excuse their poor management, forecasting, greed for frailty of the global supply chain. It's not like a asteroid hit Taiwan.
>being allowed to screw their suppliers for billions through bankruptcy (GM).
This is 100% of the issue. Those other two are issues with large business in general (tax breaks) or car dealerships (who pushed c4c).
The Big Three have been able to run their suppliers ragged through collusion because, for many suppliers, all they produce are car parts sold to The Big Three. Which means their production figures, profit margins, and general growth are completely at the whims of automakers. The few critical suppliers with a chance to get out of the industry are acquired.
The Big Three are learning the hard way that they don't have the kind of influence over chip makers that they do over their other suppliers.
It's convenient to blame automakers for what's happening in the semiconductor market right now, but I think it's an oversimplification. They're not the only ones affected by shortages, and about a year has passed since the rebound in new auto sales. The reality is that we need more semiconductor fabs because the shape of the market has changed. It's not just a perturbation from the auto sector. It's demand creation.
> Having worked in the auto industry I can say this is the sort of thing was never, ever expected from a supply shortage.
Having not worked in the auto industry, but having worked in the logistics industry, I and many many others like me have consistently warned about global catastrophes like pandemics causing unforeseen consequences of the kind we're currently experiencing.
To say that it's "frustrating" that nothing has been done before now, and nothing will likely be done - when I've literally written detailed reports complete with advanced statistical analysis for my upper management - is a massive understatement.
Hopefully the next pandemic will be severe enough that society itself is disrupted to the point where "rich" people suffer, perhaps even die. For many readers, this comment will come off as "morbid" or perhaps even be misinterpreted as a "call to violence", but in reality, this is simply "logical" behavior (survival instinct) that would result in a truly massive supply chain breakdown, and humanity as a whole doesn't learn a lesson unless there's unbearable suffering involved. I imagine a pandemic that kills 10% of the people it infects instead of 1% would cause sufficient pain for "elites" who very wrongly believe themselves to be above such inconveniences to seriously rethink their desire for "profits"... especially when a bunch of poor people who can't hoard food all raid their little compounds and the resulting unpleasantness that will result from such an outcome. It's unfortunate that I have to wish for such a thing to make people reconsider something as simple as warehousing additional supplies for unforeseen circumstances, but clearly we're there.
Glad I already got my 2021 F-150. There are lots in MI full of completed trucks awaiting chips. And looks like they're already planning temporary layoffs[1]:
tonyedgecombe|4 years ago
I think it’s the exact opposite, supply chains have held up remarkably well. If I had believed some people here we would have been eating each other by now but apart from a shortfall in toilet paper things have been fine.
f6v|4 years ago
unknown|4 years ago
[deleted]
2OEH8eoCRo0|4 years ago
an_opabinia|4 years ago
Something happened to the people in China who take 10-100 electronic parts manufactured there and turn them into 1, to deliver to assembly in the auto’s destination for the purposes of tariffs (by reducing the count of imported parts from 100 to 1). Because of the weird mechanics of manufacturing origin, which definitely affects how cars and networking equipment have to be made, this is my hypothesis for why we’re only hearing about these issues from a very narrow set of industries and not others.
In terms of what could have happened my bet is it’s going to be pretty horrible.
hourislate|4 years ago
Auto manufactures are spoiled, they get anything they want whenever they want from the Government every time they start crying. Whether it's multi billion dollar tax breaks (Ford, Oakville, GM Oshawa, etc), multi billion dollar Gov programs (cash for clunkers) at the tax payers expense or being allowed to screw their suppliers for billions through bankruptcy (GM).
Don't excuse their poor management, forecasting, greed for frailty of the global supply chain. It's not like a asteroid hit Taiwan.
mywittyname|4 years ago
This is 100% of the issue. Those other two are issues with large business in general (tax breaks) or car dealerships (who pushed c4c).
The Big Three have been able to run their suppliers ragged through collusion because, for many suppliers, all they produce are car parts sold to The Big Three. Which means their production figures, profit margins, and general growth are completely at the whims of automakers. The few critical suppliers with a chance to get out of the industry are acquired.
The Big Three are learning the hard way that they don't have the kind of influence over chip makers that they do over their other suppliers.
totalZero|4 years ago
bsder|4 years ago
Actually, Apple HAS done this. And it can kill a company.
For example: Peregrine Semiconductor who got bought by Murata in the aftermath.
hctaw|4 years ago
baix777|4 years ago
https://www.reuters.com/article/us-japan-fukushima-anniversa...
cbozeman|4 years ago
Having not worked in the auto industry, but having worked in the logistics industry, I and many many others like me have consistently warned about global catastrophes like pandemics causing unforeseen consequences of the kind we're currently experiencing.
To say that it's "frustrating" that nothing has been done before now, and nothing will likely be done - when I've literally written detailed reports complete with advanced statistical analysis for my upper management - is a massive understatement.
Hopefully the next pandemic will be severe enough that society itself is disrupted to the point where "rich" people suffer, perhaps even die. For many readers, this comment will come off as "morbid" or perhaps even be misinterpreted as a "call to violence", but in reality, this is simply "logical" behavior (survival instinct) that would result in a truly massive supply chain breakdown, and humanity as a whole doesn't learn a lesson unless there's unbearable suffering involved. I imagine a pandemic that kills 10% of the people it infects instead of 1% would cause sufficient pain for "elites" who very wrongly believe themselves to be above such inconveniences to seriously rethink their desire for "profits"... especially when a bunch of poor people who can't hoard food all raid their little compounds and the resulting unpleasantness that will result from such an outcome. It's unfortunate that I have to wish for such a thing to make people reconsider something as simple as warehousing additional supplies for unforeseen circumstances, but clearly we're there.
jcadam|4 years ago
1. https://www.yahoo.com/news/ford-extends-shutdown-stellantis-...