A coronavirus outbreak at a microchip factory in Malaysia will force Nissan North America to halt vehicle production at its plant in Smyrna, Tenn., for the next two weeks.
It was not alone.
Volvo had to shut down its assembly plant in Gothenburg, Sweden, as a result of a shortage of chips. BMW and Mercedes-Benz have warned that the next few months could be problematic for meeting production plans because of the chip shortage. And Tesla CEO Elon Musk said on Twitter Aug. 12 that "we are operating under extreme supply chain limitations regarding certain 'standard' automotive chips. Most problematic by far are Renesas & Bosch," he added.
The issues reflect the current state of affairs for supply chains in North America and around the world.
Even as they are rebounding from a year of financial challenges, suppliers continue to be dogged this summer by daily operating difficulties.
"For the most part, we're seeing that the majority of small and medium suppliers are healthy now," said Laurie Harbour, CEO of supplier consulting firm Harbour Results Inc., which surveys parts and tooling producers to gauge their condition. "And that's because companies in the U.S. and Canada got federal funding that helped them restore profitability, and allowed them to pay down debt and clean up their balance sheets."
But she reports more than a quarter of suppliers appear to be struggling — not just because of the microchip shortage or the economic disruptions of the pandemic, but because of ongoing challenges in daily business.