All around the world, manufacturers are having to curb or halt the production of goods because of an ongoing shortage of microchips. The problem has persisted through 2020 and now into the latter half of 2021. Like many hindrances, its causes ripple out from the Covid-19 pandemic, but it’s also exasperated by trade conflicts between the United States and China as well as droughts affecting Taiwan. The problem is global but its effects have increasingly affected local economies that rely on major manufacturing, most notable, auto-making. From Wentzville, Missouri, to Lansing, Michigan, auto manufacturing production floors are standing idle or at reduced operations while orders remain at a standstill.
Production Floors Go Quiet
In the U.S., Ford and General Motors recently made the decision to hold production at many of its North American manufacturing facilities. They, along with other automakers and tech companies are now facing a pile-up of unfinished products that are waiting for microchips, semiconductors, and related components. This means that more and more workers are sitting idle while their employers revaluate their options.
While the current production holds are reported to last a week or more, depending on the location, some estimates state that the chip shortage could be a persistent hindrance through to 2024. So far, car manufacturers have been the hardest hit by the issue, but producers of all types of goods have felt the pinch. The effects have not only affected workers at the U.S.’s auto manufacturing hubs, companies have put a halt to hiring truckers and delivery drivers, impacting dealerships, and other businesses that need new cars and trucks. Many of these establishments greatly contribute to local employment rates and economies and the long-term effects could be detrimental.
Affecting More Than Just U.S. Manufacturers
Other industries have had to adapt to limited machinery and electronic systems that would otherwise be essential to operations, including restaurants and hotels that rely on complex ordering systems. These industries have already been under substantial strain due to labor shortages and price fluctuations.
Have you experienced any direct impact from the global chip shortage? Has it affected your job, hiring prospects, transportation choices, or products you rely on? Comment and share your experience.