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Watch: The Current Plight of Auto Manufacturers

Ambrose Conroy, founder and chief executive officer of Seraph, discloses the findings of the firm’s latest weekly Auto Shutdown Report.

Seraph’s latest report uncovers no additional notifications of auto plant shutdowns, with the promise of a stabilization of supply chains. General Motors has resolved some of its issues with semiconductor prices and shortages, and might now be experiencing greater supply continuity, “but we’ve yet to see the benefits of that,” Conroy says.

Other auto manufacturers continue to experience a “tremendous” amount of pressure on semiconductor supply, although there are signs of a “minor easing” of the problem at the level of the big Tier 1 suppliers. “We’re not seeing the flood that was predicted for the second quarter of the year yet,” says Conroy. “We’re predicting that in Q1 of 2022, semiconductors will start to normalize.” In the meantime, automotive supply chains continue to suffer from slow reopenings, and “fits and starts” within the big auto plants.

Traditionally, it has been the responsibility of Tier 1 suppliers to provide continuity of supply of semiconductors, but the current crisis has spurred OEMs to assume a more direct role on that front. Automakers such as Tesla and Toyota are reaching deep into their supply chains, in some cases all the way back to Tiers 4 and 5, to establish better communications and a more reliable flow of key components.

The shortage of semiconductors isn’t the only problem plaguing automotive OEMs today. Conroy cites three additional concerns: Labor, with many people refusing to come back to work due partly to continuation of unemployment benefits; steel, which is short in availability and high in price, and petrochemicals, which are experiencing supply problems in the wake of the deep freeze in Texas earlier this year, which created a huge need for plastics to repair broken pipes.

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