"There's a genuine concern that if that happens, we're going to certainly have some spot outages" at auto assembly plants, Sharland said. "There's still a significant amount of pent-up demand in the market."
Global automakers are vulnerable to such disruptions because they don't keep big stockpiles of parts the way they did two decades ago. Instead, to hold down warehouse and inventory costs, they rely on a "just in time" system in which parts are delivered just days or hours ahead of when they are needed.
The problem already has surfaced at GM, which has been forced to slow production of the hot-selling Chevrolet Equinox midsize SUV because a parts supplier can't keep up. GM wouldn't identify the part but has been telling dealers they cannot order as many four-cylinder Equinoxes as they might want. The automaker said the situation is nearly fixed.
GM is aware of the broader problem and is working with parts companies to help deal with rising demand. The company has even simulated what would happen if sales rose further, identifying suppliers that would be at risk, spokeswoman Kelly Cusinato said.In anticipation of the increase, many parts makers have started hiring and are buying equipment to increase production. But they're having trouble finding machines and people with the skills needed to run them. At LTC Roll and Engineering Inc. in Clinton Township, Mich., north of Detroit, sales are rising. LTC makes rocker panels, or structural metal pieces that run along the side of cars and trucks, for GM, Chrysler and other automakers. The company hired 20 people this year to meet demand, bringing its workforce to about 100. More hiring is possible. Like many suppliers, LTC is looking for ways to raise output and avoid shortages, but Russ Senkowski, business development director, said it will be a challenge throughout the industry: "Everybody's pretty much maxed-out on their equipment capacity."
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