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Automakers Suspend Operations, Change Equipment Due to Chip Shortage

Ford is temporarily suspending production at its Kansas City assembly plant to deal with the shortage.

Automakers continue to search for ways to deal with the semiconductor chip shortage impacting the industry on a global scale.

Most companies cut back production and shift available chip inventory to high-profit vehicles like pickup trucks. Seemingly no automaker is immune to the problem, including pricey luxury and sports car makers. Mercedes-Benz, Porsche and others all recently announced moves to deal with the shortage.

This week is not different with Daimler, Stellantis and Subaru reporting today they are taking new measures to account for current run of chip shortages, both in the U.S. and in other facilities around the world.

New announcements

Ford plans to extend the shutdowns at plants that build its F-150, Ford Transit, Ford Explorer and Lincoln Aviator, Ford Edge/Lincoln Nautilus and Ford Mustang. The Kansas City Assembly Plant that builds its top-selling F-150 and Transit commercial van suspend operations for the weeks of May 3 and 10. It’s currently closed down.

GM is slowing production of its van at its Wentzville plant to deal with the chip shortage.

The Flat Rock, Michigan plant, which builds the Mustang, and Chicago plant that builds the Explorer and Aviator will also be down the first two weeks of next month. They’ve been down since the week of April 12, according to Automotive News.

The company plans to continue the reduced production of its Super Duty and medium-duty trucks at the Ohio Assembly Plant near Cleveland.

General Motors plans to move its Wentzville (Missouri) Assembly plant from three shifts to just two on a temporary basis starting the week of April 26. It’s cutting van production at the site. Production of its midsize pickups, the Chevy Colorado and GMC Canyon, are unaffected. The company just restarted operations at the facility last week after a two-week shutdown.

Other moves

In what may be the most novel approach to dealing with the issue thus far, Stellantis is using analog speedometers in some its Peugeot models instead of the digital ones they would normally come equipped with.

Daimler is cutting hours for 18,500 workers at two plants in Germany as it waits for more chips.

The move affects only the Peugeot 308, Reuters reported, which are built in France. The brand sold about 98,000 of the 308 model last year. The 308 is being phased out this fall in favor of a new vehicle. The company may reduce the price as a result of the less advanced speedo.

Daimler plans to reduce hours for 18,500 employees and idle production at its Bremen and Rastatt plants in Germany. Bremen builds the C-Class as well as the GLC, GLC Coupe and the all-electric EQC. The Rastatt plant produces the A-Class hybrid as well as the A-Class sedan, B-Class and GLA compact SUV.

Japanese automaker Subaru Corp. revealed plans to temporarily suspend production at its plant in Lafayette, Indiana. The closure will be in place until the end of April, according to officials. It will affect about 15,000 vehicles for North America, officials noted. The company builds the Ascent, Outback, Legacy and Impreza at the site.

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Weather, Increased Demand Drive Gas Prices Higher

American motorists are paying more at the pump these days as demand rises and supply drops.

When it comes to gas prices at the pump, what goes down will eventually come up.

Motorists are paying some of the highest gas prices seen in over a year, according to AAA and GasBuddy.com. With the forced shutdown of Gulf Coast and some Midwest refineries due to recent winter weather, gasoline stocks have tightened and gas prices have skyrocketed.

On the week, 66% of state averages spiked by double digits (10-22 cents), driving the national average up by 13 cents to $2.63. That is the most expensive national average since October 2019.

Prices are jumping by double-digit amounts

Gasbuddy.com reported the national average price rose for the seventh consecutive week and at its fastest pace since Hurricane Harvey, rising 10.4 cents per gallon compared with the previous week to $2.63 as of Feb. 22.

Gas was priced the highest in California, Hawaii and Washington with the price as high as $3.54 a gallon.

The website compiled the data from more than 11 million individual price reports covering more than 150,000 gas stations across the country. Additionally, GasBuddy determined that the national average price of diesel jumped 8.7 cents in the week prior to Feb. 22 and stood at $2.84 per gallon.

Federal statistics released on Feb. 22 show how gas prices stood around the country. The average price per gallon (ppg) in the U.S. as of Feb. 22 was $2.63, a 13-cent ppg increase from the previous week. Gas in the East Coast region was $2.60 a gallon, up from the prior week price of $2.47.

In New England, gas prices reached a ppg of $2.56, up from $2.47 in just a week, while West Coast ppg hit $3.15, up from $3.04. Rocky Mountain ppg jumped to $2.43, from $2.39. Gulf Coast prices were the lowest as of Feb. 22, with ppg of $2.34, up from $2.21 the week before.

Cold Hits Production Hard

“With last week’s (Feb. 15 – 21) extreme cold shutting down millions of barrels per day in refinery capacity, gas prices have seen their largest weekly climb in quite some time,” said Patrick De Haan, head of petroleum analysis for GasBuddy.

Gas prices are expected to drop in the next week or so, according to GasBuddy.com.

“The jump in price was the result of a dozen or so refineries, primarily in Texas, that were forced to shut down as the frigid temperatures threatened to wreak havoc on their exposed equipment. With the cold weather behind us, price increases should begin to slow later this week or next week, and so long as these refineries get back online in short order, we may see gas prices start to move back down in the next couple of weeks.

De Haan quickly tempered any joy about drop reminding that spring is coming, which means prices will rise again as “refineries start to transition to summer gasoline, so motorists shouldn’t jump for joy just yet.”

Weather playing a role

“When close to 40% of U.S. crude production is offline because refineries are closed, there is going to be pain at the pump until operations resume,” said Jeanette Casselano McGee, AAA spokesperson.

“The good news is the nearly two dozen impacted refiners are expected to restart operations this week, if they haven’t already. That means regular gasoline deliveries will resume and impacted stations will be re-fueled.”

In the week prior Feb. 22 there were reported refinery outages in Texas, Louisiana, Oklahoma, Arkansas, Tennessee and Kansas. AAA reported that gas prices are likely to be volatile until crude production is back to normal levels. Motorists can expect these more expensive prices to stick around, but large spikes are likely to subside.

Midwest sees big increases

According to AAA, the nation’s top 10 largest weekly increases were as follow: Ohio, up 22 cents; Arizona, up 21 cents; Iowa, up 19 cents; Minnesota, up 18 cents; Georgia, up 18 cents; Michigan, up 17 cents; Wisconsin, up 16 cents; Nebraska, up 16 cents; Indiana, up 16 cents; and Maryland, up 15 cents.

The nation’s top 10 least expensive markets as of Feb. 22 were: Mississippi, $2.27; Louisiana, $2.31; Texas, $2.32; Arkansas, $2.35; Alabama, $2.35; Oklahoma, $2.36; Utah, $2.38; Missouri, $2.38 ppg; Tennessee, $2.40; and South Carolina, $2.42.

The most expensive were California at $3.54 a gallon followed by Hawaii ($3.35) and Washington ($2.98).

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Automakers, Manufacturing Trade Group React in Horror to Washington Insurrection

Trump supporters staged an insurrection at the Capitol Building in Washington, D.C.

The rioting that swept Washington, D.C. Wednesday triggered by President Donald Trump’s false and disproven claims of election fraud triggered a nationwide backlash with some of the most severe responses coming from groups that traditionally steer clear of electoral politics.

One of the harshest statements came from the National Association of Manufacturers which not only described the insurrection as an attack on “the vision of America,” but also called for the use of the 25th Amendment, which could lead to an immediate removal of Trump from the role of president.

“This is not the vision of America that manufacturers believe in and work so hard to defend,” said Jay Timmons, NAM’s president and CEO. “We are trying to rebuild an economy and save and rebuild lives. But none of that will matter if our leaders refuse to fend off this attack on America and our democracy — because our very system of government, which underpins our very way of life, will crumble.”

(Trump attacks GM, demands it move Chinese manufacturing operations “back to America.”)

The trade group’s statement also stressed that the rioting – which culminated in a mob takeover of the U.S. Capitol – “is not law and order (but) mob rule.” And it called Vice President Mike Pence to “seriously consider” calling on the Trump Cabinet “to invoke the 25^th Amendment to preserve democracy.”

Adopted Feb. 10, 1967, the 25^th Amendment covers issues related to presidential succession and incapacity. Among other things, it allows for a sitting president to be removed, either temporarily or permanently if deemed unable or unwilling to perform the duties of the office.

But it requires the vice president and a “majority of either the principal officers of the executive departments or of such other body as Congress may by law provide,” to declare in writing the president is “unable to discharge the powers and duties of his office.”

Were Section 4 of the amendment invoked, Vice President Pence would immediately become president, though only until President-elect Joe Biden were to be sworn in on Jan. 20.

In conversations with TheDetroitBureau.com, officials with several automakers expressed similar concerns about what could happen should Trump remain in office during the next two weeks, escalating his efforts to reverse the results of the November election. On Tuesday afternoon, the president told his followers gathered in Washington, including members of the white supremacist group Proud Boys, to go home. But he also praised them and further escalated his claims that the election was stolen.

Shortly afterwards, Twitter announced a 12-hour ban on posts by the president.

A Trump supporter carrying a Confederate battle flag wanders the Capitol Building. (Photo courtesy NBC News.)

(As Biden’s new Transportation chief, “Mayor Pete” will face massive list of automotive challenges.)

With so much at risk, automakers tend to avoid direct involvement in politics. Ford, General Motors and Toyota have all come in for beatings from the Twitter-loving Trump since he launched his campaign and captured the White House more than five years ago. But all three also, as an official with one company said on background, “felt it necessary to speak out” in light of the Wednesday riots.

“The peaceful transition of power is a cornerstone of American democracy, and regardless of politics the violence at the U.S. Capitol does not reflect who we are as a nation. It’s imperative that we come together as a country and reinforce the values and ideals that unite us,” said GM Chairman and CEO Mary Barra in a statement to TheDetroitBureau.com.

With similar sentiments, Toyota said in a statement requested by TheDetroitBureau.com: “Lawlessness has no place in our society. Toyota urges everyone to demonstrate restraint and patience, and allow for the peaceful transfer of power that is the hallmark of our country. Tomorrow is a brighter day and democracy will, and always has, prevailed.”

The timing of Wednesday’s terrorist assault on the Capitol was no coincidence. It was intentionally planned to disrupt the Constitutionally mandated counting of the Electoral College votes that would complete the presidential election process and officially name Joe Biden the incoming president.

“On a day which should be a reaffirmation of one of the most important democratic ideals, the peaceful transition of power stemming from a free and fair election, we saw actions that are the antithesis of those ideals. Beyond the physical damage to our Capitol and the attacks on public servants, these were destructive acts against our shared principles and beliefs,” Ford Chairman Bill Ford and CEO Jim Farley said in a joint statement sent to TheDetroitBureau.com.

“There are no easy lessons to learn from this moment. It is clear that there will be more difficult days ahead as our country tries to overcome the things that challenge and divide us: a public health crisis, the lack of faith in public institutions, and a fractured sense of what we value as Americans.

“These problems can and must be resolved,” the two executives stressed.

(Trump attacks Ford after it agrees to a clean car deal with California.)

After a roughly eight-hour delay, during which rioters ransacked the offices of some lawmakers, including House Speaker Nancy Pelosi, the counting of the Electoral College votes resumed.

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