A global shortage in semiconductors has begun impacting automobile production as companies can’t source enough chips. Ford Motor Company is the latest to be impacted and has announced a plan to idle production of F-150s. Christina Rogers reports in The Wall Street Journal:
Ford Motor Co. F -1.69% is scheduling more downtime at several U.S. factories, including its two major truck plants, as a global shortage of semiconductors upends vehicle manufacturing for car makers in North America.
The company said Wednesday that it would halt production for two weeks in April at its truck plant in Dearborn, Mich., and take a week of downtime on the truck side of its Kansas City, Mo., assembly plant, starting Monday. It also plans to suspend work temporarily and cancel planned overtime at several other factories in North America, attributing the work stoppages to tight chip supplies.
Like other car companies, Ford has been struggling to secure enough semiconductor chips as makers of those components have been slammed with surging demand from other industries.
Ford in February said it planned to reduce production of its F-150 pickup truck—the nation’s top-selling vehicle and the company’s biggest moneymaker—because of the shortage. It also said at the time that global production losses from the chip shortfall in the first and second quarters could cut $1 billion to $2.5 billion from its pretax bottom line this year.
On Wednesday, Ford reaffirmed its early guidance and added that it would provide an update on the financial impact of the semiconductor shortage when it reports quarterly results April 28.
Factory workers at the affected plants will be put on layoff status during the downtime, a Ford spokeswoman said. In addition to unemployment benefits, Ford provides unionized workers with supplemental pay in keeping with the labor contract, she added.
The actions Ford is taking now illustrate how global car companies still confront a bumpy recovery from the pandemic, which last spring led to widespread factory shutdowns in the auto industry as businesses worked to contain the coronavirus.
While car and truck production bounced back in the second half of last year, the auto industry has encountered a new round of challenges at the start of 2021 with supply-chain snags and port backups disrupting assembly lines.
Stellantis NV, the maker of Ram, Jeep and Chrysler, said Friday that it would halt production at five North American plants through mid-April because of the lack of semiconductors. Honda Motor Co. and Toyota Motor Corp. idled some U.S. factories in March, citing the chip shortage, as well as freak weather and port backups.
General Motors Co. also has been hit by the semiconductor shortage, leading it to close some North American plants for several weeks. GM has said the lost production could hurt pretax profits by as much as $2 billion this year.
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