No electronic chips. Factories overseas shut down during COVID and demand has skyrocketed. These computer chips are needed to power the electronics in newer vehicles and for the computing power of your cell phone and other personal electronics like the crazy and popular PS5.
Additionally, the pandemic has caused a surge in the need for computers and phones as many of us have started working from home and children have started attending school remotely.
From auto parts to eyewear, hot tubs to saunas, almost every process in the manufacturing supply chain has been disrupted. Unless they build here and with raw materials from the United States
Let’s face it, the American consumer has been addicted to cheap products made in China for decades. And now, “due to COVID,” it’s becoming a huge drag on the economy. Too much money for too little property equals inflation. COVID and “free government money” are not done with us yet. Add in federal unemployment premiums and you disrupt the job market as well. It’s a mess.
The auto industry will manufacture 1.5 to 5 million fewer vehicles this year than initially expected. Most of those microchips that make your vehicle go come from Taiwan, which is why China claims Taiwan as its own. And most of the rare earth elements that make up electronic chips come from China. You are closing microchip factories there and you can’t build things here, which is why Intel announced in March that it was spending $ 20 billion to build two new chip factories in Arizona. The crisis brings opportunities, but that will not help today.
Steve Zaun, general manager of Puklich dealerships in North Dakota, told me that General Motors was 40,000 units behind to date. He says “in some models and some factories they keep building trucks and they put dummy chips in there and then they put them on big batches” while waiting for the microprocessors. GM recently shared some good news, Zaun said: “We just got a notification last week that they are starting to modernize all of these vehicles and will start shipping them as early as this week. But when you have 40,000 units late, it will take 10 to 12 weeks to catch up.
Normally you would have a choice of between 250 and 300 new vehicles in the Puklich locations. Now it’s closer to 10, but their customers are adjusting to the change, buying second-hand as soon as they hit the lot or ordering new custom models instead and waiting months for delivery.
Until we embark on an “America First” program to build more of what we consume here, even if it costs more, we are held hostage by the Chinese Communist Party. And they are determined to have the # 1 economy in the world. It will be at the expense of America. Unless we use these COVID supply chain issues as a wake-up call.
Scott Hennen hosts the statewide radio show “What’s On Your Mind?” »The AM 1100″ The Flag “, KFYR AM 550, AM 1090 KTGO” The Flag “and AM 1460 KLTC. Email him at [email protected]
This column does not necessarily reflect the opinion of the Forum Editorial Board or the ownership of the Forum.