lenr wrote:
According to several Internet stories, a company named Renesas suffered a significant fire at their Japanese chip plant in March. They supply about 2/3 of the chips used by the auto industry especially Ford, Toyota, and Nissan. So, Ford order delays have nothing to do with Covid, the economy, or someone named Joe, and everything to do with "just in time" inventory used by the auto industry. Renesas expects full production sometime in July.
Clear the chip issue out of the way, and there are other segments that are struggling.
Years ago on a launch, everybody breathed a sigh of relief when a launch on a new vehicle was delayed. My employer at the time was barely able to stay ahead when the plant was running at 10-20% of capacity. They tricked the system into accepting they were ready for production, when in fact they couldn't keep their head above water. When the delay info was transmitted I called a close friend in another segment, was it you? LOL. Turns out, yet another company was having a 90% scrap rate, and finally cried uncle!
Why is Toyota not having problems with the current chip shortage? Years ago when the nuclear power plant shut down in Japan, Toyota was greatly impacted and decided to review JIT sourcing and determined computer chips were a critical issue and increased the amount of stored inventory.