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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

#411

Post by blowski »

rjzzleep wrote: post #367
yholio wrote: post #289

Earlier quoted context omitted.

Also known as a command economy, a staple stalinist recipe.

Such an idiotic statement. When every other country was suffering under scalpers buying up mask supplies at the beginning of the pandemic Taiwan, South Korea and some other countries actively took a hand in mask distribution. The result: - cheaper access to masks for the general population - no mask shortages in critical infrastructure such as hospitals or other health care institutions - general better handling and…

Exactly there’s a “guilty by association” fallacy here.

1. You want the government to control production of some resources.

2. Stalin controlled production of some resources

3. Stalin killed millions of people

4. Therefore, you want to kill millions of people

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

#412

Post by Kliment »

hef19898 wrote: post #404
Kliment wrote: post #399

Earlier quoted context omitted.

That's not the issue here. The issue is automotive are capricious, nasty customers. They know they're a big contract so they dictate disgusting terms, like 9 month payment terms and extremely strict delivery windows and changing deliveries on very short notice. Suppliers get fined at certain auto manufacturers for not delivering within a 15 minute window, forcing their truck drivers to circle around the facility for…

Pretty sure 9 months payment terms are illegal in the EU, everything above 90 days is an issue already. Not defending the supplier squezzing that auto OEMs conduct. Also, trucks aren't circling around facilities, they are waiting at parking lots. Seriously, I don't know what kind of axe you have to grind with automotive and JIT. It does seem to be a larger issue if it is affecting all industries, and all companies. C…

I've spoken to suppliers who had 9 month payment terms to automotive (and other transport, train manufacturers are just as bad) customers. The law change in the EU was triggered by exactly such excessive contract terms. They're still common in other areas where regulators have not yet stepped in. I know the area where the factory in TFA is based, and I can tell you they don't have nearly enough parking space for deliveries, which is one reason they insist on tight delivery windows. I happen to know truck drivers and they hate this arrangement as in practice this means they have to plan to get there way earlier and then either park on the side of the road or circle around. All nearby truck parking facilities are perennially full. These factories have a habit of externalizing this kind of additional costs to suppliers and simultaneously squeezing them for price, not to mention causing broader damage to society by clogging the roads and parking facilities, but that's beside the point.

And yes, I happen to have hands on experience with procurement and sourcing. I've been redesigning customer projects around missing parts all year. Every industry is affected, but it's automotive which started it, and caused suppliers so much damage. This is what suppliers tell me and I have no reason to distrust them. My axe to grind is that I'm now dealing with the fallout.

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

#413

Post by puszczyk »

lmm wrote: post #345
TeMPOraL wrote: post #234

Earlier quoted context omitted.

Correction: they make it possible for people/entities who can afford to waste most money to get them instead of those first/lucky. But how is that a better outcome? And why should this involve people spending more money, and all the delta going to the person who was first in line or in lucky position to secure a loan and buy off all the supply?

> they make it possible for people/entities who can afford to waste most money to get them instead of those first/lucky. But how is that a better outcome? It's not "waste", it's the people who are willing to spend the most money, which are presumably the people who want/need the thing most, so it's better than allocating the thing at random. > And why should this involve people spending more money, and all the delta…

> It's not "waste", it's the people who are willing to spend the most money, which are presumably the people who want/need the thing most, so it's better than allocating the thing at random.

It’s not a waste, but it’s not best allocation either. It seems like the chips will go to established players with large and cheap credit lines and ossify the market even more.

The scalpers are not like market makers who are regulated, provide both bid and ask, and whose spread is usually quite small in comparison to scalpers.

https://www.investopedia.com/terms/m/marketmakerspread.asp

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

#414

Post by WanderPanda »

TeMPOraL wrote: post #231
hutrdvnj wrote: post #137

Earlier quoted context omitted.

Scalpers are not the problem as they seem, they are like market makers for stock exchanges. They buy low and sell high, always. The factory could tell you that they're currently out of stock for the next few months, but a scalper will never be out of stock, because their prices rises so high that only very few desperate companies would buy. The point is, it's better to have the option to buy something at a high price…

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…

If it is about “being the first” then obviously the pricing by the manufacturer is inefficient. In the end the scalpers you describe just fill in the void that is opened up by the manufacturers not adjusting their prices to the demand.

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

#415

Post by raxxorrax »

hutrdvnj wrote: post #137
kbaker wrote: post #114

One important part of the chip shortage is the massive amount of price gouging going on. Every IC is being bought up by new 3rd party distributors to scalp to desperate electronics manufacturers. Take a look at this chip we are just now crossing as an example, click on 'Non-authorized stocking distributors': https://octopart.com/tps2052bdgnr-texas+instruments-699312?r... Win Source has a bunch, but you will pay 6x th…

Scalpers are not the problem as they seem, they are like market makers for stock exchanges. They buy low and sell high, always. The factory could tell you that they're currently out of stock for the next few months, but a scalper will never be out of stock, because their prices rises so high that only very few desperate companies would buy. The point is, it's better to have the option to buy something at a high price…

Question is if that really provides benefits for the economy though. For scalpers and the stock market alike.

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

#416

Post by WanderPanda »

christophilus wrote: post #409
raducu wrote: post #403

Earlier quoted context omitted.

> Scalpers perform a social service by rationing demand and ensuring availability. While the fundamental issue is indeed price discovery, even in the most abstract market -- stocks/fx/derivatives there are numerous regulations in place to limit the predatory behavior of certain speculators. It is astonishing we have no such regulation for real-life items. Scalpers are compounding a problem, by reselling something at…

> It is astonishing we have no such regulation for real-life items. We have something close for emergency situations. It’s illegal to price gouge during something like the aftermath of a hurricane. It’s a well intentioned law. But for some things, it really may be best to let market forces dictate. For example, generators are in high demand and short supply during a hurricane. Folks snap them up so they can play Nint…

You don’t need to apologise! It is sad that people don’t get this simple mechanism. I believe that lots of misery could have been averted if market signals where not distorted when they are needed most. E.g. in your example higher prices for generatora would not only prevent people from buying them for less important things but also open up a location arbitrage opportunity and incentivise to bring generators to the place where they are needed most.

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

#417

Post by ahoka »

hristov wrote: post #71
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…

First of all this "simple" car may end up being more expensive. Doing a lot of the things the old mechanical way requires a lot of labor and labor is expensive nowadays. Having to use turning wires and vacuum tubes for instrument clusters, and a bunch of pull wires for controls... Not only would that be expensive it would require skills and equipment long lost today. Oh and the wind shield wipers -- it is possible to…

OP said "electronic control" not electronics, not the same! If you have an analog control on the dashboard directly connected to the heater element than it is electronic, but not electronically controlled.

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

#418

Post by TeMPOraL »

bluecalm wrote: post #323
medvezhenok wrote: post #244

Earlier quoted context omitted.

Scalpers allow people who are not price sensitive or have inelastic demand priority over people who are lucky / first. The ethics depends on the exact case study provided. If it's a rich person buying an xbox (not price sensitive) - that's one thing, and most people would not support it. If it's someone needing an IC for a heart monitor to stay alive (inelastic demand), most would say that providing them an IC over s…

Or maybe they are price sensitive but the goods are just worth more to them.

The scalper can't distinguish between a poorer person who really needs a thing, and a richer person who just kinda wants it. They will happily price out the former before the latter gives up.

There seems to be an assumption in the discussions about the market that people don't do stupid shit with money. That the same good cannot be both life-critical for one, and a source of cheap entertainment for another. That people only ever spend money to make more money. That they are perfectly consistent over time. That nothing is ever time-critical, it may be only time-discounted.

But the reality is, people are irrational, things take time, and markets have inertia. In a scalper-managed shortage of critical medication, it's perfectly possible for a rich person who watched one too many end-of-the-world movies to buy up the supply at high markup, to stock their fallout shelter, and have it rot there while people who need it die. It takes time for a chip scalper to insert themselves into the market, buy up the supply and advertise their existence - in that time, the factories might be wasting megadollars of money.

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

#419

Post by gnopgnip »

TeMPOraL wrote: post #231
hutrdvnj wrote: post #137

Earlier quoted context omitted.

Scalpers are not the problem as they seem, they are like market makers for stock exchanges. They buy low and sell high, always. The factory could tell you that they're currently out of stock for the next few months, but a scalper will never be out of stock, because their prices rises so high that only very few desperate companies would buy. The point is, it's better to have the option to buy something at a high price…

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…

In reality the market isn't a zero sum game. And there isn't a fixed supply of resources. In a crisis scalpers ensure that the customers receive critical goods that may otherwise be unavailable at any price. Not having that option could kill a company just as well. All of the profit money doesn't go to the scalper either, the original manufacturer can sell for higher prices, reallocate resources to make what is most profitable and meet the demands of the market. And there are price gouging laws to limit this activity for essential goods in an emergency.

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

#420

Post by enaaem »

King-Aaron wrote: post #392
bluecalm wrote: post #389

Earlier quoted context omitted.

So what's your solution? If there is limited number of 3090 GPUs should they be allocated to those who order them first? By random? Auction? Scalpers at least ensure you can get it of you really need it (that is willing to pay a lot).

I don't have a solution nor do I think I need to offer one, I just think that people who engage in (and sympathise with) scalping are grubby people.

Let’s say resources are allocated first come first served. What if I could pay someone to camp in front of the store and wait in line for me?
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