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Chip shortage leads carmaker Opel to shut German plant until 2022

reuters.com

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Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#251

Post by Ekaros »

asdff wrote: post #227
Ekaros wrote: post #146

Earlier quoted context omitted.

Would this actually ever make any sense? Not counting totalled vehicles. There really isn't so much profit in new cars price that it pays for used car fully. Unless that used car is really heavily used. Which then leads to questions of how much lifetime left the parts have.

They could lobby and get another cash for clunkers sort of arrangement from the federal government to incentivize dealers turning over leases rather than having them on the lot, and having the cost of getting back these cars publicly subsidized by the government. The run for used car supply right now is entirely due to new car supply being so strained. Pushing that demand back to new cars rather than used cars puts t…

How long longest leases are really 7 years? Is there relevant usable parts left in those vehicles? On other hand with shorter leases like 2, 3 or 5 years the cars are still perfectly functional and scrapping them would be huge waste just from environmental point alone.

Simplest thing might be just to pay some part of laid-off workers compensantion.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#252

Post by kenhwang »

da_chicken wrote: post #187
j-bos wrote: post #169

Earlier quoted context omitted.

My understanding is that JIT, as performed by Toyota, takes into account the differences in difficulty of sourcing different inventories. If this is true, one would expect that Toyota faced shortages later than other manufacturers. Does anyone have a source proving or disproving this?

It can take into account predicted difficulties. The pandemic was difficult to predict, basically everyone predicted incorrectly, and chip supply is functionally inelastic over the short term.

Toyota got a foreshock of the chip shortage during the 2011 earthquake/tsunami/nuclear disaster. So they started stockpiling chips then; from their standard 3-month supply to 6-month supply.

They figured that would've been enough to survive another incident of similar scale.

So they had no problem with car inventory for a half a year longer than every other automaker, until their additional buffer of chips also ran out.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#253

Post by awakeasleep »

dahart wrote: post #250
TeMPOraL wrote: post #231

Earlier quoted context omitted.

The way I see it, this makes sense in a hypothetical world of perfect theoretical models (you may recognize this world as being the one inhabited by frictionless, perfectly spherical cows). In this world, scalpers cause the market to price in "stickiness" - the more critical an item is to the buyer, the more they'll be willing to pay - so the supply ultimately gets allocated to the most desperate of buyers, for the p…

This actually is the idea with truly “free market” thinking, no? The money wasted in a crisis, and the companies killed who would’ve otherwise limped through, is all assumed to be less waste and a better outcome than the alternative we get if we prevent scalpers and/or cap the prices. In this theoretical world, we waste more money when supply runs out too fast, and we get companies that are not as good at competing b…

Actually the original ‘free’ in free markets meant free from economic rents

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#254

Post by chrisseaton »

the__alchemist wrote: post #167
PicassoCTs wrote: post #157

Earlier quoted context omitted.

Scalpers hedge on the fragility of just-in-time - they milk the short-term thinkers for all they saved in the good times and are thus a healthy part of the market. Why do we praise people betting on actors being hurt by bad decisions like ( https://en.wikipedia.org/wiki/Michael_Burry ) but condemn the same behavior on the smaller scale of physical products?

Scalpers hurt anyone launching a hardware product who doesn't have the order quantity to buy direct-from-manufacturer.

I don't get how it hurts anyone to have to pay market rate. If your product doesn't work at market prices, then that's your problem - not scalpers.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#255

Post by TedDoesntTalk »

beebeepka wrote: post #216
TedDoesntTalk wrote: post #190

Earlier quoted context omitted.

Why do the scalpers get first dibs on the supply?

That's the right question. As Huang said a few years ago: the more you buy, the more you save

In concert ticket sales, scalpers get preferential treatment because:

1. nepotism: they know someone who works at or owns part of the venue, or the performer, or the performer's manager, etc

2. they reliably buy in bulk

3. corruption: they pay off someone on the inside.

so which is it here?

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#256

Post by chrisseaton »

caeril wrote: post #21

What I'll never understand is why carmakers don't take advantage of this situation and address a market that's been literally BEGGING for decades for a new product: A simple, basic car, with the ONLY electronic control being for: - Valve timing - Fuel injection - Oxygen and throttle - Emissions There's a market for budget and privacy oriented customers that all carmakers seem to have ignored for two decades now. Give…

> tire pressure sensors ... luxury features

These are to keep people alive! They aren't luxuries unless you think living is a luxury!

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#257

Post by chrisseaton »

mrweasel wrote: post #165
megablast wrote: post #141

Earlier quoted context omitted.

You should be uneasy about driving. For most people, it’s the most dangerous thing you will do today. If you are going to kill someone, it’s with your car.

But I don’t need flaky sensors alert me of no existing problem. That just makes everything worse.

False positives are annoying, but not knowing about a true positive is fatal.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#258

Post by SahAssar »

lenzm wrote: post #220
da_chicken wrote: post #187

Earlier quoted context omitted.

It can take into account predicted difficulties. The pandemic was difficult to predict, basically everyone predicted incorrectly, and chip supply is functionally inelastic over the short term.

You don't need to know what the pandemic is specifically to plan for a global market shock. Knowing that you have a critical component with a long inelastic supply chain is enough.

I'm guessing the problem is to decide what is a reasonable difficulty. Even if you plan for a global market shock, how long do you plan for that to continue? How many companies failing in your supply chain do you plan for?

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#259

Post by wnissen »

xondono wrote: post #176
da_chicken wrote: post #163

Earlier quoted context omitted.

The "religious reasons" he's talking about are "zero inventory" or "JIT inventory" pioneered by Japanese auto makers in the 80s and 90s. By optimizing inventory management and understanding demand for your product, you can ensure you don't have excess inventory on-site (meaning you don't have money invested in product parts you can't sell and have to pay taxes on). It's the system that virtually every manufacturer (a…

What I don’t see discussed is how JIT has become the “securitization” of manufacturing. Everyone had an incentive to do JIT, and it improved efficiency in each individual company, but it did so by inflating a systemic risk that could be easily triggered by a “black swan”.

The thing is that it also reduces the risk of certain systemic risks. Recessions (and even worse, deflation) happen when production is too high relative to demand, but no one has noticed. In the 80s if demand for cars dropped, everyone from the dealers to the manufacturers to the parts suppliers were left with a ton of excess production. In the best case, you merely transfer some production from the end of a boom to the beginning of the end of the bust, but in the worst case all that inventory just sits around and deflates.

Re: Chip shortage leads carmaker Opel to shut German plant until 2022

#260

Post by adamc »

abfan1127 wrote: post #217
Retric wrote: post #155

Earlier quoted context omitted.

They can only do that by holding onto to supply which makes shortages worse. The same thing happens with ticket scalping at concerts, the difference is it’s more obvious that a sold out concert has empty seats vs supply sitting in a warehouse on the off chance it can be sold at 100x prices.

this is false. the supply would be gone at those low prices. Now they can be had for those who want it badly enough.

"This is false" isn't much of an argument. If there is an argument, you should probably provide that instead...
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