Automaker Furloughs, Delays from Microchip Shortage
Unfinished GM pickups wait for microchips in Fort Wayne. (photo courtesy: WPTA-TV)
Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowA global microchip shortage is continuing to have a significant impact on Indiana’s automakers, including furloughs of thousands of workers and the temporary parking of incomplete vehicles.
Inside INdiana Business has learned Lafayette-based Subaru of Indiana Automotive will temporarily suspend production for two weeks, starting Monday. SIA says there has been an interruption in the supply of certain parts that rely on semiconductors.
The company says some workers will continue to work while others will be furloughed. The company is not disclosing how many workers will be affected during the ten-day slowdown.
The company says through a combination of benefits, most furloughed employees will still net 90% of their regular net take-home pay.
An SIA spokesperson says the plant, which employs approximately 6,700 people, is scheduled to resume production on May 3.
The microchips, also known as semiconductors, are the brains of new cars. According to Car and Driver magazine, some new vehicles, depending on features, can each have more than 1,000 chips.
In northeast Indiana, the General Motors (NYSE: GM) plant in Roanoke is holding back the complete assembly of pickup trucks.
Our partners at WPTA-TV report trucks are still rolling off the assembly line, but they lack some components that depend on semiconductors.
“Since January, GM has said that when there is a shortage of semiconductors that impacts production, in some cases we intend to build vehicles without certain modules and will complete them as soon as possible,” said GM Spokesperson Stephanie Jentgen Mack. “This will help us quickly meet strong customer demand as more semiconductors become available.
For now, the company is parking the vehicles and plans to finish the final assembly when the parts arrive.
“Several of GM’s plants have utilized this process, including Fort Wayne Assembly. We will complete those vehicles as soon as possible. Once completed, we will ship them to dealers,” said Jentgen Mack.
The shutdowns occur just one year after the onset of the pandemic forced automakers to stop production to prevent the spread of the disease. This year, the challenge stems from a microchip shortage. As people sheltered at home for the past year, the consumer electronics industry saw demand for smartphones, computers and gaming consoles soar.
Honda of American Manufacturing says its North American manufacturing plants have been operating “normally” this week, including the plant in Greensburg which produces a lineup of Civics.
“For the week of April 19, some of our North American operations may adjust production based on parts supply. This is a fluid situation so we will not be providing plant or model-specific information,” Honda said in a statement to IIB. “Our purchasing and production teams are working to limit the impact of this situation and carefully manage the available supply of parts to run production and meet the needs of our customers.”
In Gibson County, Toyota Motor Manufacturing Indiana remains operational. The plant, which employs 7,000 workers, produces several models, including the highly popular midsized SUV the Highlander.
The company says it did not have any furloughs stemming from supply shortages.
TMMI released this statement to IIB:
“Due to COVID and severe weather-related events, Toyota experienced a supply shortage which affected production at our Kentucky, West Virginia, Mississippi, Texas and Mexico plants. Our manufacturing and supply chain teams worked diligently to resume normal operations as quickly as possible by evaluating the supply constraint and developing countermeasures to minimize the impact to production. While we have resumed normal operations at this time, the situation remains fluid and complex. We will continue to monitor and develop countermeasures to minimize future impact on production.”
Meanwhile, 1,000 workers at transmission plants in Kokomo and Tipton have been placed on furlough due to the semiconductor shortage.
The plants are owned by Stellantis, which is the name of the new company resulting from the merger of Fiat Chrysler Automobiles and Peugeot.
The Kokomo Tribune reports operations at Stellantis have been limited to day shifts, cutting production in half for 9-speed transmissions.