Forty years ago, country singer Merle Haggard, in his song, “Are the Good Times Really Over for Good,” wished “a Ford and a Chevy would still last 10 years like they should.”
Well, many of them do last 10 years and more these days, given the proper maintenance and depending on whether you can get replacement computer chips if one or more goes bad.
And judging from the plethora of telephone calls offering to extend the warranty on any kind of model, you wouldn’t think there’s a shortage of parts of any kind.
But obviously there is.
Both Ford and General Motors, along with Toyota and other auto manufacturers, are idling production at some of their plants because of an international shortage of computer chips that comprise the processing and memory units of the modern digital computer.
The shortage of chips, like so many other problems the past year and a half, is being blamed on COVID causing labor shortages and manufacturing shutdowns.
But COVID isn’t the only culprit. Problems, in addition to the global pandemic, include a trade dispute with China, fires, drought and snowstorms.
Plus there is a soaring demand for chips that are now used in everything from watches to kitchen appliances.
Add to that miscalculations on supply and demand.
The pandemic caused an initial slump in auto sales because few people were travelling anywhere and confidence in the economy was low. Car companies reacted by slimming down manufacturing and reducing orders for parts. including computer chips.
Modern cars, unlike the Ford or Chevy we once drove, contain dozens of computer chips to control everything from braking to steering and engine management.
Adding to the stress on chip manufacturers the pandemic caused a rush for home office items like laptops and smartphones, as many people transitioned to working from home. There was a similar rush for video game consoles. Demand for cars picked up.
It added up to, as one writer put it, to a “perfect storm” causing less supply than demand.
As always, though, the supply eventually will catch up but not before the price of everything containing a chip, including automobiles, goes up. It’s already happening.
Seems to me it should be of concern that only 12% of computer chips are now said to be produced in the United States, with the bulk coming from Asia, including Taiwan, South Korea and China.
The reason for this, of course, is it’s cheaper to outsource manufacturing of the chips to countries where labor costs less and regulations are fewer.
If this shortage drives up prices enough, maybe manufacturers will find it profitable to produce them in the U.S., but I wouldn’t bet on it.
I try not to fall into the habit of too many old folks who ascribe to another part of Haggard’s lyrics: “Are we rollin’ downhill like a snowball headed for hell?”
But I can’t help but reflect on this country’s industrial might when the Japanese bombed Pearl Harbor in 1941, thrusting the U.S. into World War II.
The American automobile industry quickly and efficiently started manufacturing components and/or finished products for military jeeps, trucks, tanks and airplanes.
It’s a good thing they didn’t have to import parts from Asia.
This is a far-fetched idea, but maybe people trying to sell those extended car warranties should, instead, go to work building computer chips. But they’re probably in India rather than Bogue Chitto — where they try to deceive you into thinking that’s where the calls are coming from.
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September 07, 2021 at 11:53AM
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Charles Dunagin: When the chips are down - McComb Enterprise Journal
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