Canada’s car production was hit particularly hard by a shortage of semiconductors

Toronto — Becoming a car worker in Canada this year meant living with considerable uncertainty.

“Inconsistent,” said Mark Sibelas, president of Ford Motor Company’s Unifor Local Branch in Oakville, Ontario. operation. “From one week to the next, you don’t know if you’re working.”

The Oakville plant, like many automotive assembly lines around the world, has experienced multiple production starts and stops this year due to a severe shortage of semiconductor chips due to pandemic-related production problems and a surge in demand for electronics. increase.

However, as supply chain problems persisted, Canada’s production slowdown turned out to be worse than in many other countries.

Sam Fiorani, Global Vehicle Forecasting Head of AutoForecast Solutions, said:

Canada’s production for the 12 months to July this year was down 6.6% year-on-year. This was already low due to widespread shutdowns in the spring of 2020.

Meanwhile, according to AutoForecast, production increased 11.3% in Mexico over the year to July and 13.9% in the United States over the same period.

According to a report by Scotiabank Economics, Canada is currently planning to produce about 1.2 million cars, well below the average annual average of 2.2 million for the 10 years to 2019, from 1.4 million last year.

Canada’s production has not reached these lows since 1982, when the industry recovered from the triple shock of the oil crisis, intensifying international competition and the worst recession of its generation.

Canada has been hit particularly hard, Fiorani said. This is due to the small number of assembly lines, and the number is distorted as soon as it goes down by one.

Automakers are also prioritizing semiconductor chips for their most profitable cars, which are pickup trucks and SUVs, he said. This meant frequent downtime in minivan production at Chrysler’s parent Stellantis plant in Windsor, Ontario. Sedan production in Brampton, Ontario. For Ford Edge production in Line, and Oakville.

“Low-profit sedans and minivans bear the brunt of lost chips when trying to focus chips on high-profit vehicles,” Fiorani said.

He said several Canadian assembly lines have also been set up for transformative investments in electric vehicle production, which are influencing production decisions.

The General Motors plant in Ingersoll, Ontario, which plans to create a new production line for electric delivery vehicles next year, has been down significantly since February.

“We went down on February 7th and have been down since then except for the three weeks of June,” said plant chairman Mike Van Boekel.

“It was a very difficult situation, especially for junior people, but obviously a few months later we had to get back to work.”

Flabio Volpe, chairman of the Auto Parts Manufacturers Association, said auto parts suppliers are also feeling a sense of crisis after being hit by a series of “rolling blackouts.”

“We all have the same problem and cannot escape it. We cannot escape the fact that microchips work very prominently in today’s cars and exponentially in the future.”

He said he expected the shortage to continue, like many, but most industry analysts are talking about the first or second quarter of next year.

There are already some signs of improvement. Workers at GM’s Ingersoll plant could eventually return to work on October 18, as the company hasn’t announced an extension to the severance, Bokel said. He also said he did not want to resume production of Equinox unless the company could sustain it.

“Hopefully, once we get started, it’s going to be stable after that.”

Windsor’s Stellantis plant was also up and running for three weeks shortly after this year’s significant downtime, and the Ford Oakville plant was closed last week and then resumed operations last week.

And some automakers are doing well due to lack of supply. Toyota spokesman Michael Briane said supply chain issues are affecting production across the North American plant, but at this point they do not expect to affect employment levels.

Still, the supply chain remains confused and fierce competition for microchips continues, creating significant uncertainty.

According to Fiorani, computer chips for the automotive industry need to be built more robustly than computer chips for phones and electronics, so profit margins are low and it’s unclear how much supply the industry can secure. ..

But he said there should be some relief next year as semiconductor companies are investing heavily in new production.

“At this point, we’re looking at the second half of next year. It could be even slower if the automotive industry isn’t allocated the right tip supply.”

Ian Bickis

Canadian press