Ford to see widespread production impact on U.S. plants this month due to chip shortage
The ongoing global shortage of semiconductors continues to hit the production schedules and bottom lines of automakers, with Ford Motor Co. on Wednesday announcing the extension of down time and new impacts at several of its plants.
The Dearborn automaker confirmed to The Detroit News that it will extend down time at plants in Chicago, Michigan and Missouri, reduce production at an Ohio plant, and schedule down time and cancel overtime shifts at a plant in Kentucky in the coming weeks.
Automakers around the world have been faced with a global shortage of microchips — essential components that power the automated and electronic features in modern vehicles — for several months.
AlixPartners, a global consulting firm, has estimated that the shortage already has cost the industry 1.4 million units of production globally. The firm predicts up to 2.5 million vehicles could be lost this year and the industry as a whole could lose $61 billion if the shortage persists.
The situation has drawn the attention of the Biden administration, which has framed the issue as an example of the nation's over-reliance on foreign suppliers and as underscoring the need to expand domestic production of key automotive parts.
Executives from the Detroit automakers were among a group of leaders who met with White House officials earlier this week to ask the administration to help bolster chip production. The auto industry has pressed the administration to set aside a portion of any chip production that comes from negotiations in Congress as automakers compete with tech companies for the parts.
Meanwhile, Ford has previously said the supply-chain issue could cost it between $1 billion and $2.5 billion in earnings for the year. Executives could provide updates on the financial impact when the automaker releases its first-quarter earnings report later this month.
On Wednesday, the automaker confirmed the following chip-related production impacts:
- Ford's Chicago, Flat Rock and Kansas City assembly plants will be down the weeks of April 19 and 26. Those plants collectively build the Ford Explorer, Police Interceptor Utility, Lincoln Aviator, Mustang, F-150 and the Transit.
- Ohio Assembly Plant will produce only Super Duty Chassis cabs and medium-duty trucks the weeks of April 19 and 26. The plant in Avon Lake also builds vans.
- Kentucky Truck Plant, which builds Super Duty trucks, the Ford Expedition and the Lincoln Navigator, will be down the weeks of April 26 and May 3. Overtime shifts will be canceled from May 8-31.
- Ford Otosan, Ford's joint venture in Turkey, will temporarily stop production of the Transit Custom and Transit 2-Ton vans from April 19 to June 3. The company opted to pull ahead two weeks of planned shutdown from the summer to that period.
"The global semiconductor shortage continues presenting challenges to a number of industries — including automakers worldwide. A fire at a chip supplier facility in Japan and severe winter storms in Texas are driving additional production changes at Ford," company spokeswoman Kelli Felker said in a statement.
She said the company continues to prioritize "key" vehicles for its allocation of semiconductors, a strategy that automakers around the world have employed as they seek to insulate high-margin SUVs and trucks from the effects of the chip shortage. Still, Ford has had to reduce production of its profit engine, the F-150, several times this year.
Meanwhile, Ford's crosstown rival General Motors Co. said Tuesday it would restart production at its Spring Hill, Tennessee, plant a week early and will not have to cancel Chevrolet Blazer production at a Mexico plant, as previously planned due to the chip shortage.
GM spokesman David Barnas said in a statement that “GM’s supply chain organization has made strides working with our supply base to mitigate the near-term impacts of the semiconductor situation on both Spring Hill Assembly and Ramos Assembly."