Japanese automakers Honda
The production suspension by the two firms is expected to last roughly a week, though both firms have also warned that the time and length suspensions could change at any time. According to Honda, workers at affected plants will not be laid off and will have the chance to continue working during the suspension.
"We continue to manage a number of supply chain issues related to the impact from COVID-19, congestion at various ports, the microchip shortage and severe winter weather over the past several weeks. Our purchasing and production teams are working to limit the impact of this situation and are adjusting production as necessary in order to carefully manage the available supply of parts and meet the needs of our customers," Honda said in a statement.
The global semiconductor shortage has been plaguing firms worldwide due to the pandemic, which forced many plants to shut down for months at a time, not only reducing demand for semiconductors, but also curbing supply. The U.S.-China trade war, however, also contributed to the shortage, due to the steep tariffs on semiconductors issued by both sides of the economic conflict. President Joe Biden has attempted to address the vulnerability of U.S. supply lines by issuing an executive order to relocate U.S. supply lines back to the U.S. and into other countries such as Japan and South Korea.
In terms of share price, the announcements don't seem to have caused much movement for either firm. On Tuesday when the announcement first broke, Honda moved slightly lower, but managed to bounce back slightly before trading wrapped up for the day, ending Tuesday trading 0.13% up, and has remained up during trading on Wednesday and Thursday. Toyota stayed mostly flat for much of the week, showing no response to the announcement, before popping and ending Thursday 2.7% up from Wednesday's close.