It sounds like the setup to a joke but it’s not. Car companies are running out of foam for seat manufacturing. The blizzard that froze parts of Texas and Mississippi also froze various petroleum plants, and guess what foam comes from? Polyurethane foam uses propylene oxide that those plants produce.
Microchip shortages have stopped production at plants around the world
This latest shortage crisis comes on the heels of the one the industry is still grappling with; the microchip shortage. It has stopped production at a variety of assembly plants around the world. But now this shortage of foam could start shutting down more plants as soon as next week.
According to Crain’s Detroit Business, the foam used for upholstery will start running out beginning Monday of next week. “A lot of production is down still for oil refinery byproduct and in a few days no one is going to be able to make” propylene oxide, an executive told Crain’s. “Everyone is scrambling. This problem is bigger and closer than the semiconductor issue.”
We’ll know soon if it is about to happen as companies would notify the UAW with any pending production cuts. With the cat out of the bag, some manufacturers are trying to soft-pedal the situation. “GM continues to work closely with the supply base to mitigate the impacts caused by the significant winter weather that affected a large portion of the country the week of Feb. 15,” said spokesman David Barnas. “We don’t anticipate any immediate production impacts.”
Many outside companies like Lear and Magna produce seats
At this point, all that some manufacturers can do is monitor things. Many manufacturers use outside companies like Lear Corporation and Magna International to produce their seats. So shutdowns won’t come from a lack of foam but a lack of seating products to assemble vehicles with.
Most assembly plants are configured around “just in time” production. This means that outside suppliers manufacture and then deliver components that will be used on that day or next. It avoids warehousing components and is coordinated to help speed up assembly.
There are no stockpiles kept by either suppliers or the auto manufacturer
That is why there can be immediate assembly line shutdowns when plants run out of components like the recent microchip-based plant closings. There are no stockpiles kept by either suppliers or the auto manufacturer itself. Just in time means that or you’re out of luck.
Many manufacturers reported today that vehicle sales are almost back up to where they were before the pandemic. So things are starting to cook for the industry. What it doesn’t need is a shortage in products. And that is exactly where it is headed if it can’t find seat foam quickly. Who would have ever guessed?