Thousands of employees in the automotive industry have been put out of work, often for weeks and months on end, as car companies struggle to cope with the impacts of the worldwide semiconductor shortage.
Semiconductors help regulate the flow of current in electronic devices. They can be found in a wide variety of products, including cars and trucks, which rely on these chips to operate backup cameras, airbags, display systems and more.
Without sufficient access to chips, automakers have been forced to temporarily freeze production at car assembly plants globally, including several plants in the U.S.
In Kansas City, Kansas, one General Motors plant has been shut down since February 8, leaving approximately 1,900 hourly workers unemployed for more than four months, according to GM spokesman David Barnas.
The Fairfax Assembly & Stamping Plant builds the Chevrolet Malibu and Cadillac XT4, both of which saw declining sales in 2020 as GM prioritized the use of semiconductors in the production of full-size pickups and full-size SUVs, Barnas said.
Clarence Brown, the president of the United Auto Workers Local 31 in Kansas City, called the layoffs devastating and expressed frustration with the situation as a whole.
“All I know is, the reason that my plant and other plants in this country are off is because of the semiconductor [shortage] and no fault of the working man,” Brown said. “When you run out of those chips, what good is a $30,000 car?”
During his 40-year career in the auto industry, Brown has witnessed multiple temporary layoffs and learned to “always have a Plan B” by saving for unexpected unemployment preemptively. Though he hasn’t struggled financially from the pay cut, Brown said that other workers, particularly younger ones without experience-fueled foresight, have.
Brown added that even though most employees continue to receive a smaller portion of their income during this time off, delays in payments and other bureaucratic snafus create further financial hardship for those living paycheck to paycheck.
Full-time hourly employees receive roughly 75% of their normal paycheck through a combination of government unemployment and a GM-provided supplement as part of their union-negotiated labor agreement, Barnas said, though he could not specify how many workers at any particular plant currently receive the benefit.
Brown said he felt obligated to continue performing his duties as union president, even with a reduced paycheck, since many union members rely on him as their primary source of information about the Fairfax plant.
“I’ve got a young membership here in Fairfax, and these kids have families. They’re nervous, and they’re upset, and rightfully so,” Brown said. “But through all of this, through the strike, through the pandemic, through the layoff … we stick together. We stick together no matter what.”
"Feast or famine"
Nicholas Livick, a door production team leader at the Fairfax plant, said that though unemployment is hard, staying home from work allowed him to be with his newborn son, which he considers a blessing.
As a third-generation auto worker, Livick grew up around the volatility of the industry, learning early on in his career to pad his savings account in preparation for the occasional temporary layoff. Given his financial preparation, the Fairfax shutdown certainly hasn’t put Livick in financial ruin, but the absence of a full paycheck still means cutting costs wherever possible -- like cooking homemade macaroni and cheese rather than buying the 99-cent version from Kraft.
“You just gotta do what you can to damage control any excess bills, anything that you were affording before you need to start canceling and you need to find ways to reduce your bills,” Livick said. “Especially in this industry, it’s either feast or famine.”
Though a closed plant can mean a tighter budget for individuals like Livick, Employee Assistance Program representative Anthony Walker said that unemployment tends to impact an employee’s mental health much more than their finances.
Walker counsels employees struggling with mental health issues and substance abuse at GM. After experiencing several layoffs throughout the course of his career, he’s learned that the loss of routine and excess of idle time that accompanies unemployment can be damaging.
“All of a sudden, they just have the rug pulled out from under them and they don’t know how to cope,” Walker said. "If you were drinking and drugging beforehand and you end up and get clean and sober, you tend to go back into what makes you feel comfortable."
Even more prevalent than addiction among assembly plant employees is the stress of the unknown, Walker said. In fact, the first thing he did when he found out that Fairfax was shutting down was grab as many materials on stress and anxiety as possible from his office.
With sporadic communication between GM and union leaders, questions about when the plant will reopen, who will be re-hired and the number of available shifts have gone unanswered.
Speaking on behalf of GM, Barnas said that the Fairfax plant will remain down through at least the week of July 5 but could not specify when the plant will resume production.
“Given the global shortage of semiconductors that’s impacting all industries globally, not just automotive, we continue to be focused on leveraging every available semiconductor to build and ship our most popular and in-demand products,” Barnas said.
Of course, the semiconductor chip shortage extends far beyond just the Fairfax plant in Kansas. Major automakers including Ford Motor Company, Stellantis (which makes Jeeps) and Volkswagen have been forced to slow or halt production due to business decisions made early in the pandemic.
The production cuts are expected to result in the loss of 3.9 million vehicles globally this year, according to consulting firm AlixPartners.
Companies are even taking preemptive measures to avoid a similar chip shortage in the future. Ford announced in May that it is redesigning parts to accept chips more accessible than traditional semiconductors.
GM recently began reopening plants in Mexico, Canada and Korea, and expected to also restart production at a plant in Michigan on June 21 that closed May 10, Barnas said. Other U.S. plants in Tennessee and Michigan went idle for a shorter span of one to two weeks in April but have since reopened.
As the worst of the chip shortage seems to have passed, more plants are resuming production. For the workers at Fairfax, the future remains uncertain. Livick said he hopes to receive an offer from GM to return to work so that he isn’t forced to move to find a job.
“If they call me back, I will definitely be back in there,” Livick said. “As a little side joke, I’m going to buy those little party-packs of chips and I’m going to give them to my team and tell them ‘We don't have a chip shortage anymore.'"