Ford Warns Of Continued Production Halts Through Mid-April As Chip Shortage Worsens

Ford Motor Company has already begun another round of production halts for two major truck plants in North America as the global shortage of semiconductors worsens. 

WSJ reports the American carmaker said Wednesday it would suspend production for two weeks in April at its truck plant in Dearborn, Michigan. At its Kansas City, Missouri truck factory, the company announced production suspensions for up to a week. There are also preparations to reduce work shifts temporarily and eliminate additional overtime shifts at several other factories. 

The impact of the chip shortage is nothing new to Ford. In February, the company announced it would continue to produce its top-selling F-150 trucks and Edge SUVs without specific semiconductor components. Now it appears some of those production lines are extending production halts a month later. 

Ford has previously stated the chip shortage could lower its earnings by at least $1 billion $2.5 billion this year. Ford reaffirmed its guidance this week but is expected to provide a more in-depth report on the semiconductor shortage when it publishes quarterly results on April 28.

A Ford spokeswoman told WSJ the latest production halts at various plants will place affected factory workers on "layoff status during the downtime." 

The continued disruption at Ford underlines the shortage of semiconductors has worsened, which may jeopardize specific industries' recoveries. 

Readers may recall the shortage originated from a confluence of factors as carmakers shuttered plants during the virus pandemic last year. At the same time, lockdowns spurred remote working and increased demand for chips for consumer electronics. Sanctions against Chinese tech companies have also made the situation even worse. 

Ford is not the only automobile manufacturer in North America experiencing production woes tied to the shortage. Stellantis NV, the maker of Ram, Jeep, and Chrysler said last week that production halts at some of it plants will continue through mid-April due to lack of chips. Honda Motor Co. and Toyota Motor Corp. are others that idled their plants in March due to shortages. General Motors expects lost production could crush its pretax profits by $2 billion this year. 

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William K. 1 week ago Member's comment

This is what can happen when somebody guesses wrong about the demand six months in the future. And these are not commodity parts in short supply. The missing parts are highly advanced custom parts produced by only one company. That is the inherent flaw in using such advanced parts in automotive computers.