Richard Kilgore, associate professor of management and business administration at Maryville University, describes the plight that automakers are currently facing, due to multiple causes of disruption in the supply chain.

Hurricane Ida’s impact on the automotive industry in the U.S. Gulf states was severe, but not entirely unpredictable, Kilgore says. Such an event “is something you put in your annual plan, and have backup contingencies for.” Less anticipated was a series of disruptions that began with the imposition of tariffs on imports from China, followed by the COVID-19 pandemic, which will end up having a much longer-term impact on the industry than even the most devastating hurricane.

Hurricane Ida impacted the automakers in three sectors: the consumer, dealerships and commercial fleets. All found themselves unable to secure parts for repair, or even new vehicles. Due to disruptive factors on a global scale, however, what might otherwise have required a one- to two-month recovery created a dilemma that could take years to resolve.

The pandemic had a particular effect on the auto industry, causing plant shutdowns on both the supplier and manufacturer sides. But the reopening of factories doesn’t signal a return to normal, in the sense of how the automotive supply chain functioned prior to those events. Having been left without sufficient backup stocks to address short-term needs, automakers are likely to modify their cost-conscious “just-in-time” supply strategies and acquire more inventory of parts as buffer stock, to guard against future crises. At the same time, supplier relationships have been reshuffled, with some Asian sources of supply shifting to European producers in response to the uncertainties those arose in their dealings with American customers.

Finally, says Kilgore, auto manufacturers will likely consider acquiring some formerly independent suppliers, bringing back in house the production of key parts and components.