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 facility modifications to increase social distancing.
Ford
DETROIT: Ford Motor is significantly reducing production of its highly profitable F-150 trucks due to the shortage of semiconductor chips that plagues the global auto industry.
The automaker said Thursday that its Dearborn truck plant in Michigan will go down by a shift of three for a week starting Monday, while truck production at the Kansas City assembly plant in Missouri will go down to two shifts of three. Ford spokeswoman Kelli Felker said both plants are expected to return to three shifts in the week of Feb. 15.
“We are working closely with suppliers to address potential production constraints related to global semiconductor shortages and are working to prioritize key vehicle lines for production, making the most of our semiconductor allocation,” he said in a communicated by e-mail.
Ford shares did not appear to be affected by the cuts, which traded around 3% during intraday trading on Thursday morning. The reporting maker is expected to report its fourth-quarter earnings and provide guidance for 2021 after the market closes on Thursday.
Automakers and parts suppliers began warning of a shortage of semiconductors late last year after demand for vehicles bounced back more strongly than expected after the two-month shutdown of plants of production due to the coronavirus pandemic.
Semiconductors are extremely important components of new vehicles for areas ranging from entertainment systems to more traditional parts such as power steering. They are also used in consumer electronics.
Ford’s confirmed plans come a day after General Motors said it would withdraw production next week at four assembly plants in Fairfax, Kansas; Ingersoll, Ontario and San Luis Potosi, Mexico. GM will also run a plant in South Korea at medium capacity this week.
Ford and other automakers (from Nissan Motor to Volkswagen) have previously reduced vehicle production due to a shortage of chips.
Kumar Galhotra, president of Ford’s Americas and International Markets, described the chip shortage earlier this week as a “very dynamic situation.” He said the company has been working with its suppliers to mitigate the impact on its plants and resolve the issue as quickly as possible.
“It’s changing all the time, but we think we’ll deal with it at least during the first half of this year,” he told CNBC.