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Worldwide computer chip shortage leading to slowed car production, temporary factory shutdowns

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Posted at 11:33 AM, Jan 12, 2021

It's been nearly a year since COVID-19 lockdowns led to a toilet paper shortage that lasted for several weeks. But the pandemic is still leading to supply chain issues that are slowing the production of goods and leading to worker furloughs in many industries.

According to CNN and the Chicago Tribune, automakers are warning that a computer chip shortage is forcing several companies to cut production, which could lead to a temporary shortage in new cars and reduced hours for some workers.

In a statement to CNN, Ford says that a "global semiconductor shortage" has forced a one-week shutdown at an assembly plant in Louisville, Kentucky. The plant, which assembles the Ford Escape and the Lincoln Corsair, employs 3,800 workers.

CNN reports that Ford will pay those employees 75% of their typical salary during the shutdown.

According to the Tribune, the shortage has forced Toyota to slow production of Tundra pickups at an assembly plant in San Antonio, Texas. Fiat Chrysler and Volkswagen have also been forced to close factories temporarily or slow production due to the shortage.

The slowdown in production comes after automakers had recently replenished new car supplies following COVID-19 related shutdowns in factories earlier this year.

According to CNN, supplies of computer chips fell rapidly last year due to coronavirus shutdowns coupled with an increase in the demand for laptop computers prompted by more professionals working from home amid the pandemic.

CNN reports that the average new car contains "between 50 to 150" computer chips and that manufacturers can't send a car off the line without all of them.