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How the microchip shortage is affecting Kentucky’s auto industry

How the microchip shortage is affecting Kentucky’s auto industry
Published: Jan. 28, 2022 at 5:42 PM EST
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GEORGETOWN, Ky. (WKYT) - The supply chain continues to make a big impact across the board— but particularly in the auto industry.

“In 2018, 2019 there was actually a reduction in demand for microchips,” said Keith Beckham.

Beckham works in the auto electronics industry and said the stockpile of computer chips is running low.

“Then the demand shoots us this extreme high and the industry just wasn’t ready to handle that,” Beckham said.

He said supply chain lag times aren’t helping manufacturers keep up the pace.

“We have to make decisions on a daily basis. Are we going to fly the parts in? Do we need to? How is our inventory today?” Beckham said.

Beckham said they’re making decisions months, sometimes a year in advance.

We took a look at the numbers from Toyota Motor Manufacturing in Kentucky. In 2021, around 6,000 fewer vehicles were produced compared to 2019. This shows the plant has been able to make it through the situation fairly well.

Beckham said things could get worse, though, moving forward.

“We have to take extraordinary measures to just make sure we have enough components to keep our customers going,” Beckham said.

He said a new Intel chip plant in Ohio will help, but production won’t ramp up at that site for a few more years.

“Really thought this would maybe go a year, go one cycle but it keeps giving,” Beckham said.

Beckham said he’s seeing huge impacts with labor being down.

A spokesperson for the Toyota Motor Manufacturing Kentucky told our newsroom the plant doesn’t expect to see an impact on employment there.

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