Update: This story has been updated to reflect additional comments and information from Stellantis
Massive storms sweeping through the Detroit area in recent days not only disrupted production at area assembly plants but also flooded a marshaling yard where finished vehicles produced by various Stellantis brands are stored ahead of being loaded on rail cars and truck transports.
While manufacturers told TheDetroitBureau.com they hope to make up for at least some of the losses in the days and weeks ahead, new storms forecast for the entire coming week could complicate matters. Worse, any losses will exacerbate vehicle shortages the industry is already experiencing due to a lack of critical microchips.
“As a result of severe storms that came through Detroit on June 25, many expressways, surface streets and neighborhoods in the area experienced significant flooding, including the Jefferson North Assembly Plant and an adjacent shipping yard,” Stellantis said in a prepared statement.
Damages could run well into the millions
The marshalling yard is used to prepare vehicles from the Jeep, Dodge, Ram and Chrysler brands for shipping by both truck and rail, spokesperson Jodi Tinson said by phone. Videos and still pictures of the facility showed what appeared to be hundreds of products under water to varying degrees. In its initial statement, the company said it is “assessing the conditions of vehicles” stored there to see which, if any, can be salvaged.
On Tuesday, the automaker added that, “As a result of the severe storms that came through Detroit on June 25, 25 vehicles were damaged in the flooded shipping yard adjacent to the Jefferson North Assembly Plant. All vehicles will be inspected and based on the severity of the damage, could be scrapped. Those vehicle assessments are ongoing.”
Flood waters can result in mold, destroy carpeting and other materials, lead to premature rust and short-circuit electronic components. Depending upon how deep the water was, many of the vehicles at the shipping depot could be headed for the junkyard. The typical new vehicle now selling for more than $40,000, according to Kelley Blue Book, and Jeep models can run well beyond that. So, the situation could readily push losses over $1 million.
The company also said that it was able to dry out and resume operations at the Jefferson North plant by Saturday at 4:30 p.m. The factory currently produces the Jeep Grand Cherokee and Dodge Durango SUVs. Both are in extremely short supply at U.S. dealerships because of production disruptions blamed on the semiconductor shortage.
Overall, U.S. dealers have an average of around 30 days’ worth of vehicles, about half of what is considered normal, according to J.D. Power and other industry sources. The chip shortages have complicated efforts to rebuild supplies after a two-month shutdown of the North American automotive manufacturing network due to the COVID pandemic.
Complicating an already severe shortage of vehicles
Adverse weather has only worsened the situation. A number of plants in Texas, for example, were forced to temporarily halt production due to a freak spring ice storm.
The heavy rains played havoc in Detroit beyond just flooding out vehicle storage lots, but also some plants making it difficult for workers to report in. The storms proved particularly fierce in the City of Detroit, as well as in Dearborn, the latter suburb the home of Ford Motor Co. Interstate 94 was completely under water in some locations when drainage pumps failed. Surface streets also became swimming pools, videos and tweets showing many vehicles all or partially submerged.
The “Dearborn Truck Plant was down (Saturday) because people couldn’t get in,” spokesperson Kelli Felker said by phone. As a result, “We didn’t have enough workers to run” the facility, which produces F-150 pickups.
While Felker didn’t have a number on production losses she said the factory typically produces a new pickup every 53 seconds. On Saturday, it runs a single, eight-hour shift.
Workers need to find new ways to work
Ford also had to halt production at its nearby Michigan Assembly Plant on Friday, said Felker, “due to a roof leak.” That was a particularly troubling development as the Wayne, Michigan factory assembles the new and highly popular Ford Bronco. The Bronco finally went into production two weeks ago after a six-month delay. Ford is struggling to catch up with an order bank of around 100,000 of the SUVs.
The automaker hopes to take steps to boost production to make up for lost volume in the coming days, the spokesperson said.
General Motors said it has not experienced production problems at any of its plants, though a spokesperson there indicated workers have been struggling to deal with flooding at their homes, as well as the challenge of getting to work where roads have been flooded along their normal routes.