As auto shops struggle to get chips, broken cars sit waiting for months

When the transmission control module on Jordan Gray's 2017 Ford Focus gave up the ghost, he never dreamed he'd end up forfeiting the car altogether — and certainly not for want of a semiconductor chip.

Gray's sedan broke down in late 2021. He took it to Tom Holzer Ford in suburban Detroit, where he said they gave him two options: Buy an entire transmission system, or wait six to 10 months for the back-ordered TCM chip.

Because the part for his model year wasn't under recall or covered by warranty, he'd have to pay out of pocket.

What's more, the dealership was out of loaner vehicles and rentals to drive while he waited.

"I could not afford the new transmission they were suggesting I get, and in the end, had to have my car voluntarily repossessed because I wouldn't be able to afford two car payments," Gray said. "It wasn't making sense to pay on a non-working vehicle."

Gray isn't alone. As the chip shortage continues into 2023, auto service centers and their customers are suffering the same backlog that has made headlines largely for its impact on automakers — and dealers say it isn't over yet.

Lisa Kropp, of Lapeer, Mich., had a similar experience with a Ford Focus in need of a new TCM. She said she stayed on the waiting list at Milnes Ford in Lapeer, 60 miles North of Detroit, for two years before giving up last month, when she traded in the Focus for a Chrysler Pacifica minivan — and $1,000 — from Hank Graff Chevrolet, 60 miles North of Detroit in Davison.

"They are probably stuck with it looking for a chip now," she said.

Jerry Moore, the Grand Rapids, Mich., division director for Kentwood-based Fox Motor Group, said the chip shortage is still causing production delays, leading to lower sales inventory on Fox dealer lots.

"Our lots are empty. The appearance is, we look closed at times," he said.

Moore, whose dealerships sell new and used foreign and domestic brands, said some makes — especially Honda and Ford — are still plagued by the chip shortage, while other companies such as General Motors, Stellantis, Audi and Kia, are seeing the light at the end of the tunnel.

Moore said a lack of chips isn't the only problem dealers and garages are facing. Manufacturers are having a hard time sourcing all kinds of components, making for longer wait times for customers in line for repairs.

Jeff Daniel, service director at Maple Hill Auto Group in Kalamazoo, Mich., said sometimes the missing component isn't a chip for the car itself, but a chip for a machine that builds the car, or a chip for the semi-truck that delivers the car to the dealership lot.

"That's where the trickle down happens," he said. "It's not just your car. It's the fact that there may be a semi that needs a transmission component … so the trucking industry is affected, as well."

Max Muncey, senior manager of corporate communications at LaFontaine Automotive in Michigan, said Ford has been the slowest brand to recover from the chip shortage, in part due to the Focus transmission issue.

Last August, LaFontaine acquired Keller Ford in the Grand Rapids suburb of Walker and renamed it LaFontaine Ford of Grand Rapids. In the acquisition, LaFontaine inherited Keller's queue of Focuses under recall waiting for TCM chips — a nightmare LaFontaine's service director has referred to as an "intergalactic back order," according to Muncey.

Other than the Ford transmission issue, Muncey said most of the vehicles in need of chips are higher-end autos with luxury features, like heated seats and steering wheels, power running boards or rear camera systems.

Dave Wright, fixed operations director at Shaheen Chevrolet in Lansing, Mich., said the impact of the chip shortage at his dealership right now is mostly limited to the remote key fobs that unlock some Chevy models.

"Those have to be ordered by vehicle identification number now, so we get them from the manufacturer. Whereas in the past, we would stock those so you can (replace them) when you lose your keys — like a lot of kids do at Michigan State on game weekends," he said. "Now, it all has to be ordered, because there's such a restriction on that."

George Glassman, owner and president at Glassman Automotive Group in suburban Detroit, said he doesn't know a single vendor or dealer that hasn't in some way been affected by automotive supply chain issues.

His dealership has resorted to selling luxury vehicles without functioning heated seats and infotainment systems in need of a chip the manufacturer couldn't get within the expected timeframe, then having the buyer return in a month or two when it comes in.

Dealers agree that patience and communication are key to getting through a tough season with an unknown expiration date, especially when it comes to repairs.

"One of the things we can't control are back-order parts — when they're going to be in and whether there are workarounds so that people can get on the road safely in this interim period, before they can get their car back," Glassman said. "… We've been fortunate we've got a pretty large loaner car fleet. But we're trying to be intelligent about the distribution of those cars."

Glassman said the uncertainty has put a strain on his employees.

"People have purchased their car with an expectation that if they have a problem, they'll bring it in, and in the normal course of business, history will tell them that over a reasonable period of time, the cars will get fixed. ... So when we run into some of these supply chain issues, naturally, if we're unable to get people into a car, that's when the anxiety can heighten," he said.

Muncey said the best thing LaFontaine did to keep its customers happy was increasing its loaner fleet last year.

Before the pandemic, he said most dealerships only carried brand-new loaners, which they would allow to be driven about 3,000 to 5,000 miles before moving them into their new vehicle inventory to be sold. But given the historic inventory shortage, that wasn't an option.

"We didn't have new cars available to put into a loaner fleet," he said. "We went out and bought hundreds of additional pre-owned vehicles to serve our guests' needs in that regard."

Fox Motors did the same thing.

"We've adapted quite a bit at multiple stores, using pre-owned vehicles when needed and putting those in our service loaner fleets," he said.

Daniel, at Maple Hill in Kalamazoo, said it's generally been a terrible time for the sales side of the dealership business, but identified one silver lining of the inventory shortage: With the average age of vehicles on the road rising to about 12.2 years, more people need parts and service, boosting business in the garage.

"Our parts business grew substantially this year, (and) our service business grew substantially this year," he said, although he didn't share specific numbers.

Wright, at Shaheen Chevrolet in Lansing, echoed that experience, but said the spike in business also means a shortage of technicians to work on vehicles.

"There's more demand, and there's not enough people to fix the cars," he said.

What this perfect storm means for customers, Wright said, is being forced to adapt to life without a car by carpooling, taking the bus, or using another means of transit. For the most part, Shaheen Chevrolet's customers — many of whom are either GM employees or related to one — have been an understanding bunch.

"People seemingly are figuring it out," Wright said. "It's just kind of like going back in time, before there were loaner cars and before everybody had the multiple vehicles and whatnot. You kind of had to figure it out."

Moore, at Fox Motors, said he doesn't have a crystal ball, but feels "some positivity" heading into this year that the component shortages will ease up.

"We are way better than we were six months ago," he said. "...We feel that 2023 will potentially have a better inventory supply."

Muncey, at LaFontaine, agreed.

"We still are seeing delays," he said. "But I would say, overall, we're in a much, much better position today than we were six months ago in terms of overall inventory, as well as moving customers that have been waiting for their chip."