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The recent shutdown of the Texas power grid means that refineries cannot produce by-products for cars and truck seats, and now automakers are scrambling to find alternatives.
The Texas-scale grid shutdown that made headlines last month continues to affect people living in the state, but it may now also affect the production of new cars. This is because the state failed to prepare for severe winter storms, which led to power outages and the suspension of local petrochemical plants, which had a domino effect on the foam needed to make new car seats.
When the state’s processing plants had to be closed, they suspended refining, which means that the refining by-products (especially the propylene oxide required for polyurethane foam) that are ultimately used in seats have not been produced for a while. This lack is right now. It's becoming more and more obvious for the auto industry. According to the auto news report that broke the news, the imminent bubble shortage may change the start of auto production next week, or even Monday. Other sources said the impact may not be felt until late March. But everyone seems to agree that finding alternative sources of seat foam is the current priority.
"Everyone is scrambling to get ahead," an auto industry executive who asked not to be named told Crane's Detroit Business. "This problem is bigger and closer than the semiconductor problem." General Motors, Stellattis, Toyota, BMW, Hyundai and Kia have all told Automotive News that they are monitoring the situation, but there is no production shutdown news to announce.
The devastating winter storm that hit Texas in mid-February was caused by a puff of cold Arctic air moving more southerly than usual. It’s not that the state has no warnings. A senior meteorologist working for the state’s unusual grid operator ERCOT wrote a few days before the worst of the storm, “This period will be in the weather in Texas. One of the most extreme events affecting the state in the history of the decline. The temperature at the beginning of next week will set a wide daily record, which may be the coldest since the 1980s."
A possible bubble shortage is not the only supply chain problem facing automakers recently. At the end of last year, the industry was unable to purchase enough microchips for new cars, which forced at least eight automakers in North America and around the world to adjust their production plant schedules. This shortage is caused by the closure of auto factories that occurred when the coronavirus began to spread globally in early 2020. At that time, automakers lowered their orders for more chips, believing that they would not need these chips if the virus drastically reduced the demand for new cars. But the demand rebounded earlier than expected, and automakers quickly learned that chip suppliers had already promised their products to companies that produce consumer electronics.