Chip shortage causes Ford to slash vehicle production at several plants in July

Chip shortage causes Ford to slash vehicle production at several plants in July

Via CNBC.com:

Ford Motor is significantly cutting its North American vehicle production in July due to an ongoing shortage of semiconductor chips impacting the global automotive industry.

The automaker said Wednesday it will idle or reduce production at eight plants, including six in the U.S., for varying periods of time next month and into early August due to the problem. Affected products range from the Ford F-150 and Ford Bronco Sport to the Ford Mustang and Ford Explorer.

Separately, the automaker said production of the Ford Ranger pickup and new Ford Bronco SUV, which recently started shipping to dealers, at its Michigan Assembly plant will be down the weeks of July 5 and July 26 due to “an unrelated part shortage.” A company spokeswoman declined to disclose further details.

The cuts are the latest for Ford, which earlier this year said it expected to lose about 50% of its vehicle production in the second quarter due to the chip issue. Ford has said it expects to lose $2.5 billion in earnings and roughly 1.1 million units of production this year because of the problem.

In a statement Wednesday, Ford said the latest production cuts due to the chip shortage are being done to prioritize “customers’ vehicles that were assembled without certain parts due to the industry-wide semiconductor shortage.”

The affected vehicles and plants are as follows:

• Ford Explorer and Lincoln Nautilus SUVs: The Chicago Assembly Plant in Illinois will be down for four weeks beginning July 5 and will run two shifts the week of Aug. 2.
• Ford F-150 pickup: The Dearborn Truck plant in Michigan will run two crews for three weeks beginning July 12.
• Ford Mustang: The Flat Rock Assembly plant in Michigan will be down for two weeks beginning July 12.
• Ford Bronco Sport SUV and upcoming Ford Maverick small pickup: The Hermosillo Assembly Plant in Mexico will run one of two shifts the weeks of July 12 and July 19.
• F-150 and Transit van: The F-150 line will be down the weeks of July 12 and July 19, while the Transit line will be down the week of July 19 at the Kansas City Assembly Plant in Missouri.
• Ford Super Duty trucks and Ford Expedition and Lincoln Navigator SUVs: The Kentucky Truck plant in Kentucky will be down the week of July 12 and run two shifts for three weeks beginning July 19.
• Ford Escape and Lincoln Corsair: The Louisville Assembly plant in Kentucky will run on a reduced schedule the week of July 19.
• Ford Edge: The Oakville Assembly Complex in Ontario, Canada, will not produce the Ford Edge crossover for three weeks beginning July 19. The plant also produces the Lincoln Nautilus crossover.

The ongoing semiconductor chip shortage is expected to cost the global automotive industry $110 billion in revenue in 2021, according to consulting firm AlixPartners.