Car Production Halted Suddenly Amid Crisis

( The panic-driven pandemic shutdowns have resulted in a parts shortage for car manufacturer Toyota. Last week, Japan’s top automaker issued a factory operation notice announcing that it would be slashing production by about 40 percent across fourteen Toyota plants in Japan. Likewise, it plans to cut production between 40 to 60 percent at most of its North American plants as well.

The pandemic response over COVID-19 has resulted in disruptions to Toyota’s supply chain that has caused additional shortages affecting production at most of its North American plants. Toyota’s manufacturing and supply chain teams are working to develop countermeasures to minimize impact on production.

In North America, Toyota is projecting a reduction of between 60,000 to 90,000 vehicles in August and another 80,000 vehicles in September. However, a representative from Toyota said that projection may change, “as the situation remains very fluid.”

Despite the reductions, Toyota does not anticipate any reductions in employment levels at this time.

Toyota production in Japan will halt completely in September at the vast majority of its plants, impacting the manufacture of a range of models, including the Prius hybrid, the Land Cruiser SUV, and the Corolla subcompact.

Currently there is a global chip shortage that has been affecting manufacturing in the entire automaking industry.

German manufacturer Volkswagen said last week that with the chip supply shortage, it could be forced to slow production in the fall. Likewise, Volkswagen is not ruling out further changes in production as well.

Ford also announced last week that, due to the semiconductor shortage, it will temporarily shut down its Kansas City assembly plant where its best-selling F-150 pickup truck is built. This one-week shutdown began on August 23.

Approximately 80 percent of semiconductor foundries, assembly and test operations are concentrated in Asia. The coronavirus unleashed on the world by China has severely disrupted semiconductor manufacturing leaving carmakers facing stiff competition from the consumer electronics industry all of whom are fighting over a deeply reduced supply of chips.

The COVID lockdowns served as a wakeup call to Washington on the importance of domestic production of vital supplies. Commerce Secretary Gina Raimondo has called the lack of domestic semiconductor manufacturing a national security risk. On Capitol Hill, there has been a bipartisan effort to begin decoupling dependence on China and bolster US manufacturing of vital supply chains.