Will broken supply chains stop Santa? Car Shortages Putting Economy at Risk…

The White House is worried about disgruntled Americans this holiday season as Santa is already struggling to deliver on his promises. In a recent speech, President Biden acknowledged the question of the season: “with the holidays coming up, you might be wondering if the gifts you planned to buy will arrive on time.” With supply chains still disrupted by the pandemic, it’s unclear what the answer to that question will be. What lies at the root of this problem? A lack of knowledge and transparency around supply chains.

The issue of supply chain disruptions is relatively new for the average American, but not unexpected when considering the decline in the U.S.’s industrial capabilities. The rise of the global economy over the last few decades led to international competition for pricing, production and transportation, with China dominating due to its impressive industrial growth. What COVID-19 demonstrated, and what the U.S. is feeling now, is what happens when the cheapest, fastest supply chains have shuttered on and off for the past two years. Relying on China and other countries for intermediate goods and critical materials (especially for cars and computer chips) has led to a shipping traffic jam, resource and product shortages, as well as the seemingly paradoxical nature of having overflowing ports and empty shelves.


Turmoil in the auto industry, a powerful engine of the global economy, is threatening growth and sending tremors through companies and communities that depend on carmakers for money and jobs.

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For every car or truck that does not roll off an assembly line in Detroit, Stuttgart or Shanghai, jobs are in jeopardy. They may be miners digging ore for steel in Finland, workers molding tires in Thailand, or Volkswagen employees in Slovakia installing instrument panels in sport utility vehicles. Their livelihoods are at the mercy of supply shortages and shipping chokeholds that are forcing factories to curtail production.

The auto industry accounts for about 3 percent of global economic output, and in carmaking countries like Germany, Mexico, Japan or South Korea, or states like Michigan, the percentage is much higher. A slowdown in automaking can leave scars that take years to recover from.

The shock waves from the semiconductor crisis, which is forcing virtually all carmakers to eliminate shifts or temporarily shut down assembly lines, could be strong enough to push some countries into recession. In Japan, home of Toyota and Nissan, parts shortages caused exports to fall by 46 percent in September compared with a year earlier — a potent demonstration of the car industry’s importance to the economy.



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