Chip shortage is chaos for automakers


Illustration for article titled Chip shortage is chaos

Photo: Chrysler

Ford is stopping production of F-150s at its factory in Dearborn, Michigan, Friday through Sunday, before restarting again on Monday, while Chrysler is the closure of minivan production for four whole weeks at its factory in Windsor, Canada, both apparently due to the global chip shortage. Expect more chaos.

As Raph pointed out this morning, the F-150 is Ford’s largest source of income. Without the F-150, Ford is just a mediocre SUV company that also sells Mustangs. The Pacifica is of much less importance to Stellantis, like Ford sold 787,422 F-series trucks last year, while Chrysler sold 93,802 Pacificas.

But what that really shows is that this chip shortage is seemingly equal opportunity, likely to the chagrin of automakers who may have at some point thought the worst of the pandemic was behind us.

Automotive News reported more on Friday on the disaster in Canada, where a union said the four-week stoppage of minivan production would begin on March 29:

General Motors Canada confirmed Wednesday that its CAMI plant in Ingersoll, Ontario, will remain inactive until at least mid-April. There the Chevrolet Equinox is assembled.

Ford’s Oakville, Ontario plant is partially assembling Ford Edge vehicles and stocking them in batches until the microchips needed to finish them arrive.

The Windsor Star reported Friday that Ford’s Essex engine plant in Windsor, Ontario, will shut down on April 16.

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The plant makes engines for the F-Series pickup truck, Mustang and E-Series commercial vans, and on Friday Ford halted production of the F-150 for three days at a plant in Michigan.

Meanwhile, Honda Canada would only say that its Alliston, Ontario factory, which builds the Civic, has been affected.

In a way, I had assumed, when this all started, that automakers would keep the flow to their more profitable products and cut off the supply of semiconductors to other products that are less profitable, but if the chip shortage is affecting the production of cars like the Chevy. Equinox and Ford Edge, on top of the F-150, are cutting the bone.

Still, according to a report from Cox Automotive on Wednesday, production shutdowns may not have much of a short-term effect for consumers, as inventories for many cars and some trucks remained healthy enough. The F-150, for example, has a 65-day inventory supply, or just slightly less than the industry average of 71, while the Ram 1500 Classic, too affected by chip shortage, has a 136-day supply. In a month or two we will examine the actual damage.

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