Global microchip shortage hits production of Ford F-150
A global shortage of the microchips used to power the automated and electronic features of vehicles has now hit production of Ford Motor Co.'s most profitable product, the F-150 pickup truck.
The Dearborn automaker confirmed Thursday that both plants where F-150 is built, Dearborn Truck Plant and Kansas City Assembly Plant, will face production disruptions next week due to the shortage.
Dearborn Truck will run one of three shifts the week of Feb. 8. The truck side of Kansas City Assembly will run two of three shifts that week (meanwhile, production of the Transit van will proceed as normal). Both plants are expected to resume their full production schedules the week of Feb. 15.
"We are working closely with suppliers to address potential production constraints tied to the global semiconductor shortage and working to prioritize key vehicle lines for production, making the most of our semiconductor allocation," spokeswoman Kelli Felker said in a statement.
The disruption is just the latest reflection of a deepening parts crunch that has complicated auto production across the globe. Automakers began to feel the effects early this year, and now industry experts say the issue could persist for months to come.
General Motors Co. announced Wednesday that it would plan downtime at three of its plants in response to the shortage. The Detroit automaker said it would shut down plants in Kansas, Mexico and Canada the week of Feb. 8, and operate a South Korea plant at half-capacity that week.
Bloomberg reported that the shutdowns will primarily hurt the automaker in the crossover segment. Its plant in Fairfax, Kansas makes the Cadillac XT4 crossover, while plants in Ontario and San Luis Potosi, Mexico, build the Chevrolet Equinox small SUV, among other models.
Stellantis NV said in a statement Thursday: "Our North American facilities are running in February. We continue to work closely with our global supply chain network to monitor the industry-wide issue.” The maker of Jeep SUVs and Ram pickup trucks had previously said it would delay the restart of a plant in Mexico, and schedule downtime at a plant in Canada to help keep production going at other North American plants.
The downtime at the Dearborn and Kansas City plants is just the latest disruption for Ford. The Blue Oval previously said it would idle two out of three shifts this week at its Chicago Assembly Plant, which builds the Ford Explorer, Lincoln Aviator and police vehicles, and employs some 5,800 people.
And the automaker's Louisville Assembly Plant, which employs about 4,100 workers and builds the Ford Escape and Lincoln Corsair, was down last week and was scheduled to be down this week, as well, following a previous week of downtime in January.
United Auto Workers members who are temporarily laid off due to suspended shifts are eligible to receive 75% of their gross pay during those periods.
Ford's plant in Oakville, Ontario, also is down this week due to the shortage, coupled with what the automaker described as another "potential concern" that was identified. Oakville builds the Ford Edge and Lincoln Nautilus.
Additionally, some shifts were shortened or cancelled last week at Dearborn Truck and Kansas City Assembly. The downtime at both sites comes as the automaker is in the midst of launching the redesigned 2021 F-150. The F-150 is the automaker's highest-volume, most-profitable vehicle.
Ford also is launching the Mustang Mach-E and Bronco Sport, and preparing to launch the full-size Bronco this summer.
The Blue Oval released its January sales numbers Wednesday; sales of the F-Series franchise were down 5.5% from January 2020.
Detroit's automakers are not alone in feeling the chip crunch. The shortage has caused production disruptions for automakers around the world, including Toyota Motor Corp., Nissan Motor Corp., Daimler AG and Volkswagen AG.
Experts attribute the shortage to a complex set of factors, including the Trump administration's trade war with China, insufficient manufacturing capacity for the chips the automotive sector uses, and market forces tied to the pandemic that ultimately pitted the auto industry against consumer electronics makers that saw demand for their products grow during the pandemic.
Once auto production came back online following pandemic-related shutdowns early in 2020, automakers essentially found themselves in line behind electronics manufacturers — and experts say supply-chain issues may take until the second half of the year to unsnarl.
The UAW has said that it is working with the automakers, as well suppliers, Congress and the Biden administration to address the issue.
"Over the past 30 years, production of semiconductors has been off-shored to South Korea, Taiwan and more recently, China," the union said in a statement last week. "Today the United States only controls manufacturing for about 14% of all semiconductors. This is an issue that demonstrates the need not to offshore American jobs and to bring back production of semiconductors and other auto supply parts to U.S. workers where as a nation we have more ability to respond to these demand issues."