JUST IN TIME PRODUCTION
Seat Foam Shortage Could Cut Car Production, and Texas Grid Failure Is Blamed
Sebastian Blanco
© Cadillac
The recent Texas grid shutdown meant oil refineries didn't make byproducts needed for car and truck seating, and now automakers are scrambling for alternatives.
The massive winter storm that hit Texas in February caused widespread damage to water and electric infrastructure, and it also shut down oil refineries in the state.
That meant fewer refinery byproducts were produced, which meant there was less polyurethane foam produced, which meant no foam for car seats—and now automakers might have to stop or slow production in March until replacement supplies can be found.
One anonymous auto executive told Automotive News that this is going to be a bigger problem than the microchip shortage the industry is already dealing with.
The Texas-size electric grid shutdown that made headlines last month continues to have an impact on people living in the state, but it may also now affect production of new automobiles. That's because the state's failure to prepare for the dramatic winter storm and the resulting power outages stopped local petrochemical plants from operating, which is having a domino effect on the foam required to make new vehicle seats.
When the state's processing plants had to shut down, they put a pause on refining oil, which meant that the oil refinery byproducts that eventually get used in seats (specifically the propylene oxide that's needed for polyurethane foam) were also not being produced for a while. And that lack is now becoming evident to the automotive industry to the degree that, according to Automotive News, which broke the news, the looming foam shortage could alter automobile production starting next week, perhaps even Monday. Other sources said the impact might not be felt until later in March. But everyone seems to agree that finding alternative sources for seat foam is a priority right now.
© Melissa Vaeth/GM GM Assembly Wentzville MO
"Everyone is scrambling," one unnamed auto-industry executive told Crain's Detroit Business."This problem is bigger and closer than the semiconductor issue."
General Motors, Stellantis, Toyota, BMW, Hyundai, and Kia all told Automotive News that they're monitoring the situation but do not have any production stoppages to announce just yet.
The devastating winter storm that hit Texas in mid-February was caused by a blast of cold Arctic air moving further south than usual. It wasn't like the state didn't have any warning, with a senior meteorologist working for the state's unusual electric grid operator, ERCOT, writing in the days before the worst of the storm hit,"This period will go down in Texas weather history as one of the most extreme events to ever impact the state. Temperatures early next week will set widespread daily records that are likely to be the coldest experienced since the 1980s."
A possible foam shortage is not the only supply chain issue that automakers have faced recently. Late last year, the industry was not able to source enough microchips for new cars, which forced at least eight automakers in North America and more around the world to adjust schedules at production plants. That shortage was driven by auto plant shutdowns that happened in early 2020 when the coronavirus started spreading across the globe. At the time, automakers lowered their orders for more chips, thinking they would not need them if the virus dramatically lowered demand for new cars. But demand bounced back sooner than expected and automakers quickly learned chip suppliers had by then promised their products to companies making consumer electronics.
"Everyone is scrambling," one unnamed auto-industry executive told Crain's Detroit Business."This problem is bigger and closer than the semiconductor issue."
General Motors, Stellantis, Toyota, BMW, Hyundai, and Kia all told Automotive News that they're monitoring the situation but do not have any production stoppages to announce just yet.
The devastating winter storm that hit Texas in mid-February was caused by a blast of cold Arctic air moving further south than usual. It wasn't like the state didn't have any warning, with a senior meteorologist working for the state's unusual electric grid operator, ERCOT, writing in the days before the worst of the storm hit,"This period will go down in Texas weather history as one of the most extreme events to ever impact the state. Temperatures early next week will set widespread daily records that are likely to be the coldest experienced since the 1980s."
A possible foam shortage is not the only supply chain issue that automakers have faced recently. Late last year, the industry was not able to source enough microchips for new cars, which forced at least eight automakers in North America and more around the world to adjust schedules at production plants. That shortage was driven by auto plant shutdowns that happened in early 2020 when the coronavirus started spreading across the globe. At the time, automakers lowered their orders for more chips, thinking they would not need them if the virus dramatically lowered demand for new cars. But demand bounced back sooner than expected and automakers quickly learned chip suppliers had by then promised their products to companies making consumer electronics.
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