Supply chain woes mounted world-wide for makers of everything from cars and clothing to home siding and medical needle containers, as the extreme Texas weather and port backlogs compounded problems for manufacturers already beset by pandemic disruptions.
Toyota Motor Corp. TM 1.01% , Honda Motor Co. HMC 0.23% and Samsung Electronics Co. were the latest multinational companies to chime in about setbacks, with the two auto makers saying Wednesday they would halt production at plants in North America. Toyota cited a shortage of petrochemicals, manufacturing of which has been hobbled by last month’s Texas freeze. Honda pointed to a combination of port issues, the semiconductor shortage, pandemic-related problems and the crippling U.S. weather.
Samsung, a smartphone and chip-making giant, said a severe global shortage in semiconductors would hurt its business into the next quarter. Koh Dong-jin, the co-chief executive officer of Samsung, told investors Wednesday that dealing with the chip supply-demand imbalance had become a priority for staff and that executives were traveling overseas, despite restrictions, to discuss the issue with business partners.
The disruptions underscore how several forces are coming together to squeeze the world’s supply chains, from the pandemic-driven rise in consumer demand for tech goods to a backlog of imports at clogged California ports to U.S. factory outages caused by weather woes. They are creating cost increases and delays for numerous industries, company executives and analysts say, affecting profit margins and the prices that companies and consumers ultimately pay for many goods.
‘We’ve been scrambling to get enough raw material.’— Tom Nathanson, whose Mississippi-based company makes plastic sheeting
“We’ve been scrambling to get enough raw material,” said Tom Nathanson, chief executive of Summit Plastics Inc., who predicted possible lasting damage to the plastics industry in the form of lost customers.
He said the Mississippi company, which makes plastic sheeting for everything from hospital gowns to packaging, was already contending with supply-demand issues before the Texas cold spell. “The costs have absolutely been passed on,” Mr. Nathanson said. “We, as consumers, are feeling that crunch.”
The disruptions, which come as the U.S. and some other economies are beginning to lurch toward normalcy, show how messy the reopening of business is proving to be a year after pandemic’s onset, and how vulnerable supply chains remain.
The long-term economic impact remains unclear. Federal Reserve Chairman Jerome Powell said at a press conference Wednesday that he expects supply chains to adjust as economic growth accelerates. “It’s very possible, let’s put it that way, that you will see bottlenecks emerge and then clear over time…. These are not permanent. It’s not like the supply side will be unable to adapt to these things. It will—the market will clear. It just may take some time.”