Rubber Scarcity Creates New Headache for Beleaguered Automakers

Snarled shipping lines are disrupting the movement of natural rubber, a key material used in tires as well as components under the hood. With the global supply already running short following stockpiling by China and a devastating leaf disease, rubber prices are on the rise and some U.S. auto suppliers are rushing to secure shipments before the market gets squeezed further.

As companies in virtually every market grapple with shortages, perhaps no industry is being hit harder than autos. Multiple plants have been idled by a semiconductor crisis that’s costing tens of billions of dollars in lost revenue, while materials from seating foam to metal to plastic resin are also becoming harder to find. The industry, which has long relied on just-in-time manufacturing to reduce costs, is finding it has limited flexibility to deal with supply chain disturbances wrought by the pandemic.

Source: Bloomberg