INDIANAPOLIS (WISH) – The microchip shortage is partially to blame for the high price of cars. The shortage comes as auto manufacturers across the globe are struggling to meet consumer’s demand. News 8’s Richard Essex talked to one dealer that has zero new cars or trucks on the lot but has taken orders for almost 60 new cars and trucks to be delivered in December, if the part becomes available
Sitting in the parking lot is one of the most popular and profitable truck brands in North America. According to past sale reports from General Motors, the company is expected to produce nearly 500,000 Chevrolet Silverado’s and 200,000 GMC Sierras in 2021. However, an increase in the demand for the microchips that operate everything from fuel delivery to the navigation system has forced GM to mothball thousands of trucks.
I-team 8 first showed you video Monday of hundreds sitting in the parking lot of a former GM plant in Kokomo.
“I think a lot of businesses thought that the downturn would be more severe or more long-lasting than what it turned out to be and so you have these pull backs and then it takes a long time for everything to ramp back up and catch up on production,” said Kyle Anderson, a clinical assistant professor of Business Economics at the Kelley School of Business at Indiana University.
Tim Gasaway lives right across the street from this old GM plant, the same plant where he retired in 2016 after nearly 30 years as an engineer for GM. Gasaway told I team 8 that GM once made microprocessors for their vehicles at this plant, but the company abandoned plans to upgrade the plant several years ago.
“Basically, it boils down to, they were talking it was going to be in the neighborhood of $100 million to just upgrade,” said Gasaway.
There are hundreds of retired GM employees that live in Kokomo. When the company started shipping trucks to this plant it fueled speculation that the company was coming back to town. That is not the case.
“We have put our economy, our position of the United States, in jeopardy because the chips are being manufactured overseas as we depend more on electronics. And all the chips are being made in China and Taiwan, South Korea, then we are in jeopardy of not being able to move forward” said Denise Dodd, a retired GM pipe fitter.
General Motors builds the Silverado and GMC Sierra in Fort Wayne — a plant shut down again this week due to the shortage. Anderson says the microchip shortage could persist well into next year.
“I think it is really going to limit growth that we are going to see all throughout the auto industry. It is going to take a while for it to work out and we are going to have to scale back production in other parts of the vehicles so we can get these chips and get everything worked out,” said Anderson.
GM is taking a handful of trucks back to the Fort Wayne plant every week to finish building them. I-team 8 is told the company is making plans to store up to 7,000 trucks in Kokomo until parts supply meets demand.