BUSINESS & AG
B2 — THE OBSERVER & BAKER CITY HERALD
THuRSDAY, JAnuARY 6, 2022
New auto sales up in 2021, but long way from full recovery
By TOM KRISHER
AP Auto Writer
DETROIT — U.S. new
vehicle sales rebounded
slightly last year from
2020’s dismal numbers,
but forecasters expect them
to be more than 2 million
below the years before the
coronavirus pandemic.
The reason? Although
there are plenty of cus-
tomers who want to buy
new vehicles at hefty
prices, there still aren’t
enough computer chips
available for the industry
to fully crank up its facto-
ries. So supplies are short,
prices are high, and many
customers can’t get what
they want.
“Demand is not off at
all,” said Michelle Krebs,
executive analyst for Cox
Automotive. “What is off is
sales, because the inventory
doesn’t exist.”
Cox expects 2021 sales
to be 14.9 million vehicles,
up 2.5% from 2020, the year
the pandemic hit the U.S.
and forced the industry to
shut down for eight weeks.
But over the five years
before the pandemic, sales
averaged 17.3 million.
Ryan Garza/Detroit Free Press-TNS
General Motors trucks sit in a gated parking lot next to the Economy Lot across from Bishop International Airport in Flint, Michigan, on Aug.
11, 2021.
Among the hardest hit
by the chip shortage was
General Motors, which was
unseated by Toyota last
year as the nation’s top-
selling automaker for the
first time.
GM on Tuesday, Jan.
4 reported that last year’s
U.S. sales fell nearly 13%
from 2020 levels to just
over 2.2 million. Toyota, on
the other hand, saw its sales
rise 10.4% to just over 2.3
million.
Like other automakers,
GM was forced to tem-
porarily close factories
during the year as it strug-
gled to get semiconduc-
tors, especially early in the
year. Krebs said she isn’t
sure if GM will be able
to unseat Toyota this year
because Toyota has man-
aged the chip shortage
better and has a faster
distribution.
Among other auto-
makers reporting full-year
Manchin still a no, Biden’s $2 trillion
bill on Democrats’ back burner
By ALAN FRAM
Associated Press
WASHINGTON — Democratic Sen.
Joe Manchin said Tuesday, Jan. 4, that
his opposition to President Joe Biden’s
roughly $2 trillion package of social
and environmental initiatives remains
undimmed, as party leaders said work
on the stalled measure was on hold until
at least later this month.
Manchin, D-W.Va., told reporters
that he’s not currently negotiating with
the White House over the standoff,
but didn’t rule out continuing talks.
Manchin, who was his party’s chief
remaining holdout over months of talks,
surprised and angered party leaders
before Christmas by saying he could not
support the legislation as written.
“I feel as strongly today as I did
then,” Manchin said in his first extended
remarks since announcing his opposi-
tion on Dec. 19, when he cited concerns
about the measure’s impact on infla-
tion and federal deficits. Other Demo-
crats have dismissed those criticisms as
unfounded.
His comments Jan. 4, along with
leaders’ concessions that the bill is on
the back burner for now, suggested that
the legislation’s fate remains in doubt
as the calendar slips ever closer to this
November’s congressional elections.
There are examples of flailing pres-
idential priorities eventually clawing
their way to passage, including
then-President Barack Obama’s health
care overhaul, a 2009 effort that wasn’t
enacted until March 2010. But often,
the prospects for obstructed bills fade
over time as opponents mount offensives
that weaken support from lawmakers
seeking reelection in closely divided
districts.
Democrats would need all their votes
in the 50-50 Senate to advance the mea-
sure over unanimous Republican oppo-
sition. A version of the package has
already passed the House.
Manchin has said the bill is too costly
and wants to pare down the number of
proposals in the wide-ranging measure.
It currently would bolster family ser-
vices, health care, climate change and
other programs, and is mostly paid for
with higher taxes on the wealthy and
large corporations.
One of Manchin’s targets is the bill’s
AGENDA
Continued from Page B1
towns would create opportunities for
farmers, support local businesses and
create good-paying jobs for rural folks,
he said.
Sixth generation chicken producer
Corwin Heatwole said he knew he had to
do something different when dozens of
farms around him were closing down and
his own farm wasn’t viable for the next
generation.
“But there was no option for us to
get our animals processed locally, and
everyone kept telling us that farmers don’t
start chicken companies,” the Harrison-
burg, Virginia, farmer said.
But that’s what he did, launching
Farmer Focus in 2014 to process organic
chickens.
“With no other options, we started a
company with a mission to promote and
protect generational family farms,” he
said.
Farmer Focus partners with 73 inde-
Anna Moneymaker/Getty Images-TNS
Sen. Joe Manchin, D-W.Va., speaks to reporters
as he leaves the Senate Chambers following a
vote on Dec. 15, 2021, in Washington, D.C.
extension of a beefed-up child tax credit,
a top goal for many Democrats, which
has included recently expired monthly
checks of up to $300 for millions of
recipients. Manchin said Tuesday he
wants that benefit, which unemployed
people can currently receive, narrowed
to only help those with jobs.
Senate Majority Leader Chuck
Schumer, D-N.Y., has said his chamber
will focus early this month on voting
rights legislation, another Democratic
priority. He said he plans to hold votes
on that issue by Jan. 17.
He also said Jan. 4 that “the stakes
are high for us to find common ground”
on the social and environment bill,
which has been Biden’s primary
domestic priority for months. Schumer
said negotiations are continuing and said
Democrats will “keep working until we
get something done.”
No. 2 Senate Democratic leader
Richard Durbin, D-Ill., said lawmakers
“clearly will return” to the $2 trillion
package when their work on voting legis-
lation is finished.
pendent family farmers and is on track to
exceed 100 this year. It provides poultry
products for about 1 million consumers,
he said.
It’s a unique and scalable model that
focuses on financial stability and sustain-
ability, and it brings solutions to the three
pain points that exist with conglomerates,
he said.
Those pain points are producers’ lack
of ownership of the animals and inventory
on their farm, lack of operational control
and the tournament pay system that plays
farmers against each other, he said.
“This model has enabled a resilient
community of thriving farmers while
bringing the consumers the transparent
and traceable products that they’ve been
looking for,” he said.
He’s excited the administration is
focused on increasing capabilities that
create more options for family farmers,
he said.
“We ourselves look forward to part-
nering on these new programs to expand
and touch more farmers and communi-
ties,” he said.
sales numbers were Honda,
with an 8.9% increase, and
Hyundai, which saw an
18.6% jump.
Analysts and industry
executives expect chip sup-
plies to slowly improve
this year, with more avail-
able in the second half.
But it’s not certain when
they’ll get back to pre-pan-
demic levels. The average
gas-powered vehicle has
about 1,000 chips, and elec-
tric vehicles can have more
than double that number.
IHS Markit analyst Phil
Amsrud, who follows auto-
motive chips, said supplies
won’t improve immediately.
“We’re seeing 2022 as
being an improvement over
2021, but it’s not going
to start January third or
fourth,” he said, adding that
the second half should be
better than the first.
There are signs that
the number of vehicles
on dealer lots is growing,
though. It rose to more than
1 million last month for
the first time since August,
Krebs said. But that’s still
1.5 million below 2020 and
2.5 million fewer than in
2019.
Cox is predicting that
U.S. new vehicle sales
sales will increase by more
than 1 million this year, to
around 16 million.
Amsrud attributed the
vehicle inventory growth
more to automakers man-
aging the chip shortage
better, rather than any
dramatic growth in chip
supplies.
Many have diverted
the chips they get to more
expensive models with
higher profit margins.
Because of strong
demand and low supplies,
J.D. Power says the average
new vehicle price rose to
$45,743 in December, 20%
higher than a year ago and
the first time it finished
above $45,000.
Sedans definitely
aren’t driving demand for
new vehicles. J.D. Power
reports that SUVs and
pickup trucks accounted
for a record 80.2% of new
vehicle sales in December.
GRIDLOCK
Continued from Page B1
are largely price-takers,
meaning they cannot pass
along higher costs.
Peter Friedmann, exec-
utive director of the Agri-
culture Transportation
Coalition, a trade group in
Washington, D.C., that rep-
resents U.S. agricultural
exporters, said he has heard
from at least one member
— a hay grower in Wash-
ington — who did not
bother cutting hay for the
first time because he could
not get his product through
the ports.
Delayed and canceled
shipments hurt agricultural
exporters in another way,
too. Once international cus-
tomers turn elsewhere for
products, Friedmann said
U.S. producers risk losing
them forever.
“If we can’t deliver it
affordably and depend-
ably, our foreign customers
will go somewhere else,”
he said. “The reality is,
there is nothing we produce
here in the U.S. agricultur-
ally ... that can’t be sourced
from somewhere else in the
world.”
Experts say the logjam at
ports will likely persist well
into 2022, though new leg-
islation and infrastructure
improvements may help to
alleviate the problem.
‘Self-inflicted wounds’
Friedmann said there
are several “self-inflicted
wounds” that led to the cur-
rent crisis.
Most terminals along
the West Coast, he said,
were built to accommo-
date smaller ships that car-
ried 7,000 containers at a
time. Today’s largest vessels
are almost a quarter-mile
long and carry from 18,000
to more than 22,000
containers.
“There’s no place to
store this stuff when it gets
off (the ship),” Friedmann
said. That’s especially true
in cities where the docks
are surrounded by busy
downtown areas.
Friedmann said the U.S.
also has some of the lowest
allowable truck weights in
the world, with California
interstate highways capped
at 80,000 pounds gross
weight. Instead of hauling
loads in one or two truck-
loads, he said it takes two
or three, contributing to
the shortage of chassis and
drivers.
The American Trucking
Associations estimated the
driver shortage would hit
a record high of more than
80,000 drivers by the end of
the year.
Although these prob-
lems had been festering in
the U.S. for decades, Fried-
mann said, the coronavirus
pandemic brought them to a
head in 2020.
COVID-19 caused shut-
downs at ports and factories
Port of Seattle/Contributed Photo
The CMA-CGM Benjamin Franklin arrives in Elliott Bay and prepares
to dock at the Port of Seattle.
in China, which limited the
production and movement
of products. Meanwhile,
more Americans were
stuck at home and shopping
online, amping up demand
for imported consumer
products.
That created the per-
fect recipe for delays. Last
month, a record 111 con-
tainer ships were anchored
off the Southern California
coast, waiting to dock and
unload their cargo.
“It’s complete confu-
sion,” Friedmann said,
adding that carrier service
schedules have become
“completely undependable.”
In a recent survey, Agri-
culture Transportation Coa-
lition members reported
losing 22% of their export
sales due to supply chain
problems.
‘Shipping fatigue’
At BOSSCO Trading,
Jacobson, the international
sales manager, and Shelly
Boshart Davis, vice presi-
dent of international sales,
say they are left exhausted.
“There’s this shipping
fatigue that’s really starting
to set in,” said Boshart
Davis, who also serves as
a Republican representa-
tive in the Oregon Legisla-
ture. “We pride ourselves
on being flexible, but it feels
like we’re putting out fires
every day, every hour, all
the time.”
BOSSCO Trading mar-
kets straw from about 40
grass seed farms around the
Willamette Valley.
Once the seed crop is
harvested, BOSSCO’s
crews arrive to rake and
bale the leftover straw,
which then goes to a hay
press in Salem. The bales
are loaded into shipping
containers and sent to ports
in Seattle, Tacoma and
Portland via truck and rail.
Normally, BOSSCO
Trading handles 2,200 con-
tainers in a year. How-
ever, Jacobson said it is
becoming harder to find
containers, as they are stuck
on ships or at docks. Book-
ings from some carriers
have also been canceled for
months — called “vessel
voids” — leaving products
stranded.
Boshart Davis estimates
the company’s costs are
up 100% to 150% between
increased rates and fees, to
say nothing of the mental
and emotional toll.
“When you can’t be pro-
ductive and efficient ... it
costs a lot of money when
you’re scrambling all the
time,” she said.
Todd Fryhover, pres-
ident of the Washington
Apple Commission, said his
members are under similar
pressure.
Apples are Washington’s
most valuable agricultural
commodity, with $2.1 bil-
lion in sales in 2020. About
30% of the state’s produc-
tion is exported, though
Fryhover said port conges-
tion has producers concen-
trating this year more on
North American markets as
opposed to overseas.
But that also has a cost.
For every 1 million boxes of
fresh apples shifted into the
U.S. domestic market, the
price drops about 50 cents
per box as supply begins to
overtake demand, Fryhover
said.
“The entire supply chain
has been affected,” he said.
“It’s not easy to point at one
place and say, ‘Fix this and
everything will be better.’
That’s certainly not the
case.”
Increasing capacity
The vast majority
of marine cargo in the
Northwest is handled by
the ports of Seattle and
Tacoma, Washington,
governed by the North-
west Seaport Alliance. It
is the fifth-busiest con-
tainer gateway in the U.S.,
behind the ports of Los
Angeles, Long Beach,
New York-New Jersey and
Savannah, Georgia.
Tom Bellerud, chief
operations officer for the
seaport alliance, said agri-
culture is a dominant
exporter in the region.
Congestion has ham-
pered the Seattle-Tacoma
gateway, Bellerud said,
though he sees signs that
pressure may be letting up
somewhat. The number of
ships that were once backed
up in Seattle — albeit not as
extreme as Southern Cali-
fornia — is now the lowest
it has been “in a very long
time,” he said.
Both Seattle and Tacoma
are using alternative con-
tainer yards, freeing up
valuable space on the ter-
minal docks and allowing
products to move more effi-
ciently, he said.