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I wonder if the dip really matters – in the long run.

Chips, chips and more chips….

We all like chips – most of us – and these chips are not THAT kind of chip.
The chips I am referring to here are tiny microchip processors that have a very significant application to the efficiency of today’s common mode of transportation. It is already a problem for the auto industry and it will remain one for a “relatively” short time. In the grand scheme of things, a few -or several- months is not a long time. But, in our “do it now”, “I wanted it yesterday”, society it seems like another lifetime of waiting.

So the auto makers – and especially GM – have come to depend on the microchip processors that Taiwan has become very skilled at manufacturing. Intel, our only maker of microchips has recently said that they do not possess the skills or facilities to make these microchips. Auto sales slowed due to: first, a UAW strike, then Covid-19, then re-tooling for ventilators, and then re-tooling again for manufacturing of cars and trucks. Mostly trucks. What happened in the meantime was a surprise to all. 

Instead of folks drawing in and remaining “dormant” as expected due to the Covid-19 “crisis”, it seems everyone was getting out and about, buying cars, trucks, RVs, and, traveling on wheels was once again part of the American pastime. So, automotive sales did not quiet during the 2020 economy as anticipated initially, and, in fact, there was a somewhat unexpected surge in sales in the automotive sector. Good for the economy.

But the supply of chips and the manufacturing of our marvelled four and six wheeled “toys” had fallen desperately behind. Sales far outpaced supplies and now … supplies are too low and everyone is scrambling to find available products to help the consumer with an insatiable desire to “upgrade” or “modernize” their wheels. We, in the automotive industry, instinctively turn to the pre-owned vehicle market and begin to buy our needed supplies there. That has now driven up the value of used vehicles. An artificial effect? Maybe not, but a temporary one for sure. Value is value, perceived or real. Businesses must find a way to remain in existence. If you are not finding what you want today, now… is that really a bad thing? You can answer this one for yourself here. “To each his own” somebody said.

You want to keep the economy going? Get out to your local small businesses, restaurants, shops, beauty parlors/barbers and retailers of all varieties and support them by helping them grow their business. Make sure you are doing more than your share to help your local churches reach the needy folks in our neighborhoods and keep spreading and speaking positivity.

In the long run, this dip will only be a faded memory and the chip will continue to be a major part of our future. Will somebody in America please step up and take the wheel? Let’s get back to being innovators, creators and benefactors to society. Let’s look outside ourselves and reach out to pull others along with us.  In just a few months the manufacturers – and the “chip makers” – will have caught up to the demand and all will return to normal.

Forward. Always forward!

Bill Smith
Desk: 909-527-8177
Fleet and Commercial Director