Consumers, manufacturers wait months for repairs and parts

Jul 25, 2023

Ben Lieberman had his Honda sedan towed to a repair shop on Nov. 4 after a bump in the road deployed his passenger-side airbag. Five months later, he's still waiting to get his car back.

"I only own one car, so this has been beyond frustrating," said Mr. Lieberman, an analyst at the Competitive Enterprise Institute, a free-market think tank in Washington. "I have heard that thieves are stealing Honda airbags out of cars and selling them on the black market. Who ever thought there would ever be such a thing as an airbag black market?"

Mr. Lieberman — who has relied on public transportation and Uber to commute while awaiting the unknown part needed to reset his airbag — is among millions of consumers who have shifted their expectations amid pandemic-era inflation and supply shortages.

Some experts say the problem is making the U.S. resemble less prosperous nations whose populations have long grown accustomed to paying more and waiting months for routine car repairs, smart device replacements and even cookie orders.

"President [Ronald] Reagan used to joke about how long Soviet consumers would have to wait to acquire basic goods and services. For American consumers, however, there is nothing normal about this ‘new normal,’" Oliver McPherson-Smith, a policy analyst at the American Consumer Institute, said in an email.

Even as the economy recovers slowly from the COVID-19 pandemic, unpredictable component shortages have vexed the nation's supply chain, said Mr. McPherson, who testified about inflation before the House Oversight subcommittee on energy policy recently.

"Sometimes these delays result in minor disappointments for consumers, such as a [recent] shortage of Girl Scout cookies. But when emergency services struggle to buy new ambulances and fire trucks, these supply chain issues pose serious threats to life and limb," he said in an email.

Over the past year, President Biden's Supply Chain Disruptions Task Force has led an administration-wide effort to improve the flow of goods, strengthen supply chains and lower consumer prices.

The White House has touted the success of this effort at unclogging ports, resolving shipping container shortages and unloading shipments more quickly heading into the recent winter holidays.

Household appliances have recovered to a large extent from parts shortages and repair delays that raged early in the pandemic. According to Julie Wood of General Electric Appliances, less than 3% of replacement parts for the company's refrigerators, microwaves and other staple items are on back-order.

"The supply situation has improved considerably since the height of the pandemic, and we are optimistic it will level out in 2023," Ms. Wood said in an email.

Mr. Biden has taken to crediting his administration's investment of federal tax dollars in green energy infrastructure, including Electric Vehicle charging stations and EV production, for strengthening the supply chain.

"Bringing the key parts of the supply chain back to American companies in every part of the country has expanded factories and building new ones creates tens of tens of thousands of good paying jobs," he said in a speech touting electric vehicles at a North Carolina factory.

But critical shortages of basic metal, mineral and computer components have limited the manufacturing industry's ability to make these products — especially EVs.

"The [limited] availability of cobalt and other minerals has led to concerns about the ability to produce new batteries for new vehicles, particularly EVs, as well as replacement batteries for all vehicles," said Michael Chung, director of market intelligence for the Auto Care Association.

Strict COVID-19 lockdowns in China and Russia's invasion of Ukraine have cut off supplies of electronics microprocessors, minerals and metals from those three countries even as the pandemic fades, according to the Bethesda, Maryland-based trade group of auto parts makers.

That has meant rising prices and competition for parts from different industries that have seen surges in demand as components come back into stock, Mr. Chung said.

"While supply availability has improved over the past year, there is concern of whether the right computer chips will be available for the automotive industry, particularly for new vehicles, since other industries have been waiting for microprocessors as well for cellular phones, home appliances, computers," he added.

Automobiles have borne the brunt of the shortages this year. Auto shops have waited months to replace faulty wiring harnesses, headlights, transmissions, air conditioning systems and batteries, especially in electronics-intensive newer vehicles involved in crashes.

"Unfortunately, a perfect storm happened in the automotive industry during COVID. Automakers had been using an older kind of chip for some time and only a small number of manufacturers make those chips," said Greg Brannon, director of automotive engineering for auto club AAA. "When COVID hit and people stopped buying cars, many of those manufacturers shifted to consumer electronics and the availability hasn't recovered even as car demand is back up."

In addition, automakers ramping up EV production in response to the Biden administration's priorities have competed for chip manufacturing capacity, diverting resources away from auto repair shops.

"Not only do these manufacturers have to build chips for new cars, but for cars already on the market that need parts," Mr. Brannon said. "Where there was ample supply in many cases, it isn't there anymore. Depending on the individual vehicle and part, you could be waiting months for a replacement."

Officials at AAA recommend that drivers needing auto repairs consider getting a rental car or taking public transportation while waiting for parts to arrive, noting that selling an unrepaired vehicle would result in a severe financial loss.

A recent survey from the Specialty Equipment Market Association, a trade group of auto parts makers, found more than 90% of member companies said supply chain shortages had hurt their business — and most expect the issues to last throughout the rest of this year before a "return to normal."

"Not only are consumers seeing higher prices and longer wait times, but businesses are too," Gavin Knapp, SEMA director of market research, said in an email. "The production disruption combined with transportation issues, skyrocketed costs for raw materials and components and sub-assemblies used for production, plus the additional shipping costs have necessitated raising prices and prioritizing production for the most in-demand products."

Mr. Knapp expects the wait times to ease by next year, but says some production costs will remain above pre-pandemic levels even then.

"Consumers, to this point, have been willing to pay higher prices to get what they want, even if it means extra wait time," he said. "This has created a lot of retail competition for the products that have been available immediately."

Shortages, delays and dramatic price increases for replacement parts have spread beyond the car industry, however — and economists say that's because consumers have refused to stop spending even as policymakers raise interest rates to tamp down inflation.

"The COVID lockdowns and the provision of [relief] money made it easy for a short period to buy consumer goods but more difficult to produce them," said Sam Kain, a finance teacher at Walsh College in Michigan. "It also led directly to increasing prices, as more money chased fewer goods."

"When demand exceeds supply, there are shortages," added Walter Block, an economist at Loyola University New Orleans. "Shortages are practically a synonym for long wait times."

Another problem is that many factories closed during pandemic lockdowns and failed to reopen as demand resurged, said Elif Kongar, a business analytics professor at the University of New Haven in Connecticut.

"From the consumer perspective, rapid increase in the demand for technological products including smartphones, laptops and IoT equipment, electric vehicles and the like put manufacturers under pressure to operate in higher volumes than originally planned," she said.

The Technology and Manufacturing Association says manufacturers have struggled to obtain specialized electric components — not just computer chips — and are still not back to pre-pandemic production speeds.

The independent trade group's nearly 1,000 member companies have waited up to 13 months for rare metals, titanium and other essential materials during the pandemic.

"Manufacturing slows down because they can't produce goods and then there are less products to be sold," said TMA Chairman Nicole Wolter, who has lobbied Congress for a bipartisan solution. "Not only does this put jobs at risk, but it also increases prices, just as we’ve seen over the last couple of years."

Ms. Wolter said the "tight-knit" manufacturing community is willing to work together to ensure high-tech manufacturers prioritize the biggest needs at the local, state and national levels — if federal leaders show a similar willingness to collaborate.

Relief can't come soon enough for John R. Keough, a Michigan-based metal casting engineer and entrepreneur who says the delays have limited his foundry's production levels.

He said the war between Russia and Ukraine is making him wait up to 14 weeks for short-run cast metals. That includes iron, steel, aluminum and copper alloys — metals needed for the weldings and castings in everything from farm equipment and General Motors pickup truck seat heaters to metalworking and material handling equipment.

"Semiconductor chips and all the devices and subsystems that use them are in short supply or have very long lead times," Mr. Keough said in an email. "Aluminum extrusions, historically from Russia, are just not available, or available after many months at astronomical prices."

Correction: A previous version of this article misspelled the name of John R. Keough.

• Sean Salai can be reached at [email protected].

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