After chip crisis, foam shortage threatening US auto industry of production loss
- Foam production has been hit severely in the US due to the harsh weather.
- Petrochemical plants play a key role in foam manufacturing.
If the auto industry witnessed an unprecedented slowdown in 2020 due to the Coronavirus pandemic, 2021 started with few other problems. It was the global microchip shortage that impacted the auto industry across the world at the beginning, resulting in a production halt. Now, another problem is impacting the automakers, especially in the US market – foam shortage.
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In February 2021, the crippling arctic weather in the Southern US region has impacted the supply of the foam for seats. The rough weather led to the shutting down of power throughout the region that is home to a large number of oil refineries. Despite fuel, the oil industry is responsible for some other by-products as well that are used in automobile production.
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The foam production across the US has been impacted in mid-February due to the arctic blast. Oil is required to produce polyurethane foam that is used in automotive seats. According to a publication, the plants manufacturing foam could shut down as early as March 8. The propylene oxide is a by-product of the crude oil refining process that is required for the foam.
While there are other foam suppliers around the globe, tapping them quickly to avoid larger production shutdown has become a great concern for the US auto industry. The US auto industry is reportedly to witness a production halt in the coming weeks due to the foam shortage. The auto industry is hoping that the factors will fall in place soon to offset the impact of the foam shortage.
The foam shortage is becoming salt in the wound of an ongoing microchip shortage that has resulted in General Motors facing temporary production shutdowns at its multiple manufacturing plants. According to estimates, GM’s global production in 2021 could drop by more than 200,000 units because of the chip shortage. Apart from that, the Covid-19 induced supply chain shortage is yet to be over.
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