How automakers collided with the global chip shortage

Executives at automakers like Volkswagen AG and General Motors Co. were upbeat about the industry’s recovery in early fall. Demand was recovering from pandemic lows, and its factories were humming again.

Then came the warnings. Like a Skype call on November 12 between VW’s logistics chief and officials at auto parts supplier Continental AG. The supplier said it would not deliver a range of core components that VW needed due to a global semiconductor shortage, people familiar with the call said.

Other automakers were receiving similar alerts from suppliers.

By December, the flow of parts from Continental, Robert Bosch GmbH and other suppliers had been so depleted that VW announced that it would stop production of top-selling brands such as Audi and its namesake VW brand at plants in Europe, China and North America. Audi, citing a chip shortage, laid off 10,000 factory workers for the first time since the spring closures. Ford Motor Co., Honda Motor Co., and others soon reduced production of vehicles from large trucks to compact sedans.

Continental began informing customers in the fourth quarter of supply chain issues, said a company spokesman, who declined to comment on specific customer calls. Bosch declined to comment on exchanges with suppliers. VW, GM, Ford and Honda said they are closely monitoring the situation and working to limit the impact.


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