Ford is reducing vehicle production at six plants in North America due to a shortage of chips
Ford Motor is significantly reducing production at six plants in North America due to the ongoing global shortage of semiconductor chips, including facilities to manufacture highly profitable vans.
Measures vary by plant, but range from overtime cancellations to facilities closed for up to three weeks from April to June. Or a combination of both.
The affected plants are located in Illinois, Ohio, Kentucky, Michigan, Missouri, and Ontario, Canada. They manufacture a range of products – from F-150 pickups and vans to Ford Explorer SUVs and Ford Escape Crossovers.
Production of the F-150 in Dearborn, Michigan, will cease in the weeks of April 5th through April 12th, the company said. Ford is also canceling overtime at the factory in the weeks of April 26, May 10, May 31, and June 21. Another facility in Missouri that will manufacture the full-size F-150 will be shut down for a week starting Monday. Overtime at the plant will be suspended for eight weeks for most of June.
Ford began resuming vehicle production in the U.S. on May 18, 2020 with new coronavirus safety protocols such as health assessments, personal protective equipment, and changes to facilities to increase social distancing.
Ford previously expected the shortage could cut its profits by $ 1 billion to $ 2.5 billion in 2021. Without releasing any new guidance, the company said it would “provide an update on the financial implications of the semiconductor shortage” when it reports its first quarter earnings on April 28th.
Semiconductors are key components that are used, among other things, in the infotainment, power steering and braking systems of new vehicles. With multiple plants closed due to Covid last year, suppliers turned semiconductors away from automakers and into other industries, creating a shortage after consumer demand fell more than expected.
Consulting firm AlixPartners estimates the chip shortage will reduce global auto industry sales by $ 60.6 billion this year. The problem affects every automaker differently.
Ford’s Oakville, Canada plant, where the Ford Edge Crossover is manufactured, will be out of service for three weeks from the week of April 12th – the longest of all plants. Another facility in Kentucky, where the Ford Escape and Lincoln Corsair are manufactured, will be shut down from two weeks on.
Other plants that make Ford Explorer and Lincoln Aviator SUVs, Ford Transit and E-Series vans, and medium-duty trucks and chassis cabs are eliminating overtime shifts.
Correction: This article has been updated to reflect that Ford is reducing production at six plants. In a previous version of this article, the number of plants was incorrectly stated.