Automakers face new production challengeMarch 8, 2021
The recent Texas power outage has left refineries unable to produce a number of derivatives needed to seat cars and trucks, and automakers are now looking for alternatives.
The massive power outage in Texas, which has been covered extensively in the past month, continues to impact people living in the state, but it could now also affect new car production. This is because power outages have halted operations at local petrochemical plants, affecting the production of foam needed to make new vehicle seats.
When the state’s refineries were shut down, they suspended refining, which meant that the refinery byproducts that were ultimately used in the seats (in particular, the propylene oxide needed for polyurethane foam) was also not produced for a while. A number of experts noted that production may begin to stop as early as this week. Other sources said that the effects may not appear until March. But everyone seems to agree that finding alternative seat foam manufacturers is a priority right now.
General Motors, Stellantis, Toyota, BMW, Hyundai and Kia have told Automotive News that they are monitoring the situation but have no plans to report any production stoppages for now.
Potential foam shortages aren’t the only supply chain issues that automakers have been grappling with lately. Late last year, the industry was unable to obtain enough microchips for new cars, forcing at least eight automakers in North America and other countries to adjust schedules at manufacturing plants. This shortage was caused by business shutdowns that occurred in early 2020, when the coronavirus began to spread around the world. At the time, automakers slashed orders for new chips, believing they would not need them if the virus drastically reduced demand for new cars. But demand bounced back sooner than expected, and automakers quickly learned that chip suppliers had pledged their products to consumer electronics companies by then.
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