What can America expect as supply chain issues leave the auto industry stuck in park?

Oct 27, 2021

2 min

Mark Thompson, PhD


America’s auto industry is slowing down – and this time the main source is not a matter of labor issues or a lack of customers. This time this crisis, like those plaguing so many other industries lies in the tangled web of supply chain issues that is challenging manufacturing, industries and economies across America and the continent.


In the United States, the auto industry has been hit particularly hard.


The nation’s largest automaker and the rest of the global auto industry have been sporadically shutting down plants since late last year due to the semiconductor shortage, which has cut supplies on dealer lots and driven new vehicle prices to record levels.

To be sure, production still isn’t back to normal because some of the factories will only run on one shift per day.

Phil Amsrud, senior principal analyst for IHS Markit who studies the chip market, said GM’s move is a good sign, but doesn’t signal the end of the chip shortage. “It’s just not a sign that the patient is through all the rough spots and it’s a matter of weeks before they’re released from the hospital,” he said. October 22 - Associated Press



There has been a lot of coverage, and a lot of questions asked as to how this happened and what it will take to untangle the mess.


And that’s where experts from Augusta can help with coverage.


"There are several factors but the main themes are suppliers inability to react to the increased demand, and governmental policies and responses,” explains Dr. Mark Thompson an economist and expert regarding the industrial issues facing America. “When COVID initially hit, demand dropped considerably. As it relates to the shortage of computer chips, what do you think consumers were demanding during the early phase of COVID...computers, laptops, handheld devices, etc. Technology companies responded and chip manufacturers switch to produce these items. Now, as consumers demand for new cars pick up, there is a shortage of the chips necessary for new cars. As it relates to government intervention, the stimulus has also increased demand for various goods and services furthering the shortage."



As for how long will it take for America to see the supply chain replenished?


"Good guess,” says Thompson. "I would say that we should expect to continue to see these shortages through the rest of 2021 and part of the way in 2022."


If you’re a journalist covering the ongoing supply-chain issues – then let our experts help with your stories.


Dr. Mark Thompson is an economist with highly accomplished work in business conditions, risk analysis, energy and the healthcare industry. Dr. Thompson is available to speak with media regarding the economic and industrial issues facing America during this supply chain crisis - simply click on his icon now to arrange an interview today.


Connect with:
Mark Thompson, PhD

Mark Thompson, PhD

Dean of Hull College of Business, Professor of Economics

Mark Thompson, PhD, dean of the Hull College of Business, is an economist in business conditions, risk analysis, energy and health care.

EconomicsEnergyHealthcare IndustryRisk Analysis

You might also like...

Check out some other posts from Augusta University

3 min

Expert Q&A - Craig Albert, PhD, talks election interference

Going into the final days of the 2024 election cycle there is a very real concern about election interference from both foreign and domestic actors, and it's something that will continue to be monitored even after the final votes are tallied. Craig Albert, PhD, graduate director of the PhD in Intelligence, Defense, and Cybersecurity Policy and Master of Arts in Intelligence and Security Studies programs at Augusta University, is a leading expert on propaganda, information warfare and national security studies. Albert has answered key questions about who is trying to interfere in the U.S. elections and why it matters. Q: How and when should someone vote and does it protect you more to avoid interference? The access to instantaneous news or events could affect people and their understanding of whom they want to vote for all the way up until the day they vote. Because of this ease of access, this election cycle has especially shown us how cautious we need to be in regards to scams. It's also why I know there has been a big push for early voting and mail-in voting, and it's necessary in some cases, but I prefer to vote on Election Day because you never know what type of news might come out about one of the candidates or parties. If something comes out that proves to be true, it could affect how someone might vote, but if you voted before Election Day, it's too late. At the same time, a very serious deepfake could be released that could manipulate how people choose to vote and it could mislead people, as well. Q: What are the consequences of the optics of an 'unfair' election? What the U.S. needs to be cautious about is preserving and maintaining the legitimacy of the election cycle. After the election, no matter who wins, narratives of interference and how it impacted the election are going to be shared and that's just irresponsible. Unless there's damning information and very clear evidence, you shouldn't mess around with the idea that the election was interfered with, because that could threaten the very structure of the United States. Q: What's the potential for post-election meddling? We have domestic bad actors as well as foreign maligned actors that are going to say the election was delegitimized no matter who wins. They have social media campaigns ready to post no matter which side wins, they're going to circulate false videos of ballot boxes burning or news that not all the the votes were counted and things of that nature. They're going to do all kinds of things because anybody can fake a ballot box being burned or mail in votes not being counted properly on video or something like that. The problem is if it goes out there or becomes viral, so many people will believe it and that sows discord. So, that creates distrust in the public system on a pretty big swath of the American population. Q: Who benefits from post-election doubts and chaos? You have foreign actors that really build on the type of anger that the political candidates and their parties already use through their propaganda and rhetoric. We have already seen Russia amplifying the message that somebody cheated or elections were hacked, and you have China, Iran, Venezuela, ISIS and Al Qaeda doing that, as well. You also have regular cyber criminals that just want to sew discord and distress so they can manipulate people later on and get into our banking systems and things of that nature. You have potentially hundreds, if not thousands of attack vectors coming at the United States between election night and January 20 when the new President will be sworn in. And then afterwards, they will all still be trying to create chaos, rebellion, civil unrest, or in the case of Iran, China and Russia, open civil war in the United States. Looking to know more and covering the election, Augusta University can help. Albert is available to speak with media – simply click on his name to arrange an interview today.

5 min

AU expert talks Hurricane Helene’s impact on the supply chain

Hurricane Helene tore a path of destruction beginning at Florida’s Big Bend region and stretching up through Georgia, South Carolina, North Carolina, Tennessee and Virginia. As those affected have slowly been able to grasp the scope, a different form of trouble in the aftermath is creating a ripple effect that will be felt around the region, country and even the world. Western North Carolina is at the heart of the problem leading to sourcing, transportation and disruption issues. While still trying to understand the full scope of the impact in the most remote areas, ongoing recovery efforts continue following the storm where the death toll has risen to over 250 as of Oct. 14. According to Rick Franza, PhD, professor in the James M. Hull College of Business and an expert on operations and supply chain management, said lessons learned from the COVID-19 pandemic and the collapse of the Francis Scott Key Bridge at the Port of Baltimore incident earlier this year can help with mitigation of risk and recovering during these problematic times. “The biggest thing you’re always dealing with in situations like this is uncertainty,” said Franza. “You can’t expect everything. You can’t anticipate everything, but we learned a lot from COVID and then the Baltimore bridge collapse and the supply chain disruptions those caused.” Franza said North Carolina is a case study in disruption to the supply chain at three different points: the source, manufacturing and transportation. “When we think about supply chain disruptions, people don’t typically think about it affecting the physical supply, but rather the transportation and logistics,” said Franza. “This one’s a little trickier because you have one industry affected by the supply of raw materials, another affected by the manufacturing of supplies and so many more will be affected by transportation problems.” Problems in manufacturing One industry that has been heavily impacted by the storm is the medical field, particularly the manufacturing of IV fluid bags. Baxter International, one of the largest producers of IV fluid bags in the country, has a manufacturing plant located in Marion, North Carolina. According to the American Hospital Association, the Marion plant produces 1.5 million IV bags per day, which equates to 60% of the country’s supply. “There are two big questions affecting the supply chain for those IV fluid bags,” said Franza. “If you lose a manufacturing facility, like the one in Marion, does another facility or a competitor have the ability to add capacity, even if it’s just a short term? The other piece of it is, even if they have the capacity, do they have the raw material inputs? So it’s a ripple effect.” In the wake of the storm, Baxter announced its other manufacturing facilities would increase their capacity. Thanks to its new Mount Carmel Mega Distribution Center located in Mississippi, the company feels confident it will be able to meet the needs of hospitals across the country. Baxter plans to increase allocation levels for direct customers from 40% to 60% and for distributors from 10% to 60%. They are also increasing allocations for designated children’s hospitals by 100%. Problems at the source Just outside the town of Spruce Pine, a town of less than 2,200 people located in the Blue Ridge Mountains, are two mines that produce an estimated 80% to 90% of the world’s most pure quartz. The quartz found in those mines is used in the manufacturing of semiconductors for microchips for everything from smartphones to cars to medical devices and more. The two companies that manage those two mines, Sibelco and The Quartz Corp, shut down operations on Sept. 26 ahead of the storm. As recovery efforts continue in the region, there remains more uncertainty as the full scope of the damage continues to be realized, and there is no certain timeline for when things will get started again. “The issue with natural resources like quartz is, unless you’ve come up with some method of producing an artificial version of it, you can’t really make it somewhere else,” said Franza. “Since there isn’t currently an alternative, it then becomes a question of is the mine accessible or how long until it is accessible and people can get back to regular operations?” Problems with transportation In Western North Carolina, entire roads along with buildings and other structures were wiped out as streams and rivers surged and mudslides occurred. On top of getting the mine back up and running, there is also the problem of getting the raw quartz where it needs to go. “Once you are able to access the ability of the mine to get back online, you then have the problem of whether the raw material can get where it needs to go to be processed,” said Franza. “A big problem in western North Carolina is entire roads are gone, and it’s not a simple repave. On top of that, Interstate 40 is estimated to be shut down until sometime next year, so transportation in that area is going to be extremely difficult for quite a while.” The good news is that quartz and the microchips that it is used in are not perishable items, and some chip manufacturers may have several weeks’ worth of quartz supply built up to be able to continue production. But an extended shutdown will likely mean even more chip shortages, similar to the global chip shortage that began in 2020 and lasted through 2023 due to the COVID-19 pandemic and the tightened restrictions in the countries that manufacture those chips. The loss of roads is not the only source of recent transportation problems, as immediately following the during the storm there was a three-day disruption in imports at 36 ports, including shutting 14 down stretching from Maine to Texas, as 45,000 dockworkers went on strike over pay. While that disruption could have caused serious issues, particularly for the upcoming holiday season, Franza said many companies have learned from previous disruptions, and most of the goods needed for Cyber Monday, Black Friday and preparing for the holiday season were already in the country. “I have heard that somewhere between 80% to 90% of the items for the holidays are already here, so the dock workers’ strike would not have been as much of an issue for the holidays, but there would definitely have been things you’d run out of.” Franza said the biggest problem during situations such as this is misinformation. “One of the biggest problems is most people are uninformed,” Ranza said. “Look at the toilet paper shortage at the beginning of COVID. If all of a sudden people rush to buy everything up and hoard it all, you can’t meet that demand so it causes even more problems. People need to be better informed because rumors start and then more problems are caused.” But Franza reiterated that companies have learned from past events, and that planning has made the supply chain stronger. “I think we’re better than we were four years ago because each of these crises builds our toolbox on how to plan for and deal with disruptions. It has built resiliency.”

2 min

AU study shows participation in civil society groups lowers suicide rates

A new study by Lance Hunter, PhD, professor of social science in Augusta University’s Pamplin College of Arts, Humanities, and Social Sciences, reveals a direct link between voluntary involvement in civil social groups and a lower risk of suicide. In the study, published in Cross-Cultural Research, Hunter looked at data gathered from 2000 to 2019 from 156 countries with varying levels of development from Africa, Asia, Australia, Europe, North America and South America and found that participation in civil society groups, both political and non-political, may produce positive social and psychological benefits that are associated with lower suicide rates. September is National Suicide Prevention Month, during which mental health advocates, prevention organizations and other community groups promote suicide prevention awareness. “The greater the voluntary participation in civil society groups within the country, the lower the suicide rates are for that country,” said Hunter. “Voluntary civil society participation is a great way for people to connect with other individuals with similar interests and possibly find meaning and purpose to some degree. That in turn decreases feelings of social isolation, which can decrease the likelihood of suicidality or suicide.” Based on the research, he noted that social isolation is a major factor in suicide ideation and attempted suicide but it’s not the only factor. “It is important to note there are many psychological, biological, social and mental health factors that can contribute to suicide risk. Civil society participation and social isolation are just two factors among many that can affect suicidality,” said Hunter. Meredith Rausch, PhD, associate professor in the College of Education and Human Development’s Department of Research, Counseling and Curriculum, said research shows ideation and deaths by suicide in the United States tend to rise between February and April and again in August and September. “I have found the change in seasons often leads to people feeling overwhelmed when it comes to thinking about enduring another season,” said Rausch. “While the advent of spring or autumn may seem enjoyable or hopeful to some people, others find it to represent an entirely new season and the idea of experiencing that is exhausting.” Rausch also notes it’s important to note how these times of the year also coincide with the academic year, causing an increase in bullying, frustration with academics or other negative experiences for school-aged children. According to a 2023 study by the World Health Organization, more than 700,000 people worldwide die each year by suicide, and suicide is the fourth-leading cause of death among people 15 to 29 years old. Interested in learning more - let us help. Lance Hunter, PhD, is available to speak with media about this important topic - simply click on his icon to arrange an interview today.

View all posts