First, manufacturers were shut by the pandemic. Then as demand rebounded, vital chips became scarce. Now a shortage of seat foam could be the next kink in automotive supply chains.
When refineries in Texas had to stop processing oil because of the unprecedented winter storm, they also stopped making byproducts such as propylene oxide needed for a range of industrial uses — including to make foam for auto seats.
The chain reaction could impact seat production as soon as this week or next, industry sources told Automotive News and Crain's Detroit Business, which would quickly impact vehicle assembly.
"There's some risk of shutdown in the next couple of weeks if they don't get the rest of the refineries back up and running in Texas," said Daron Gifford, a partner at Plante Moran leading its automotive industry consulting services practice.
Automakers have not yet made plans to idle any plants, but many say they are working with their suppliers.
A spokeswoman for Stellantis, the recently merged combination of Fiat Chrysler Automobiles and France's PSA, said last week: "We are closely monitoring the situation. At this time, we do not expect an impact on our operations."
A General Motors spokesman said that the company "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."
Ford Motor Co. and Honda North America spokespeople issued similar statements.
Toyota, Hyundai and Kia also said they are coordinating with seating suppliers but that it was too early to identify any impacts.
As of late last week, Honda, Nissan and Mercedes-Benz said they had seen no production disruption so far.
Major automotive seating suppliers were largely hush on the issue last week.
Suburban Detroit seating supplier Lear Corp. declined to comment on the situation. Canadian supply giant Magna International and seating supplier Adient did not return inquiries on the topic by press time.
"For suppliers that have really good management teams that are pretty resilient, this can be a real opportunity for the suppliers to figure out some creative solutions," said Gifford. "The immediate thing is visibility, communicating with that supplier to see what their alternatives are as far as how do they keep production moving, and a lot of the suppliers may have alternatives already."
As automakers navigate crisis after crisis, including the looming foam shortage, purchasing departments, too, have an opportunity to learn strategies to better weather disruptions in production.
Moreover, this signals the need for greater supply chain visibility, he said.
"There needs to be a much more comprehensive and analytical look at the supply chain and not only the immediate supplier, but down the tiers and supply chain as well," Gifford said.
Larry P. Vellequette, Laurence Iliff, Michael Martinez, Hannah Lutz, Urvaksh Karkaria, Vince Bond Jr. and Philip Nussel of Automotive News; Greg Layson of Automotive News Canada; and Dustin Walsh of Crain's Detroit Business contributed to this report.
