Ford partially assembles some vehicles, halts two plants due to chip shortage

DETROIT (Reuters) – Ford Motor Co said on Thursday that for now it will assemble its highly profitable F-150 pickup trucks and Edge SUVs in North America without certain parts and will idle two assembly plants due to a global shortage of semiconductor chips. .

The US automaker said the chip shortage, combined with a part shortage caused by the winter storm in the central US, is prompting it to build the vehicles and then hold them “for several weeks” until can be completed and submitted. The affected vehicles number “in the thousands,” a spokeswoman said.

Ford said production is also idle at the Louisville, Kentucky and Cologne, Germany plants.

The costs associated with these actions are covered in the Dearborn, Michigan-based company’s earlier forecast that this year’s earnings could be hit by $ 1 billion to $ 2.5 billion due to chip shortages. .

The shortage, which has affected automakers globally, is due to a confluence of factors. Automakers closed plants for two months during the COVID-19 pandemic last year and canceled chip orders. Meanwhile, demand for chips emerged from the consumer electronics industry as people worked from home and played video games. Now automakers must compete for chips.

Last month, Ford cut shifts at two plants that make full-size F-150 pickups, a move that followed production cuts for other vehicles. Ford, like other automakers, has said it will prioritize and allocate chips to its higher-margin vehicles when it can.

Also on Thursday, Japan’s Nissan Motor Co said a shortage of chips led it to cut production at its plants in Smyrna, Tennessee, Canton, Mississippi and Aguascalientes, Mexico. It did not disclose how much volume it would lose from the stock.

On Monday, General Motors Co said it was building some full-size light-duty pickup trucks without a fuel management module, reducing fuel economy by one mile per gallon. GM previously said the chip shortage could cut as much as $ 2 billion from this year’s profits.

Ford trucks and SUVs that are assembled without certain parts include some electronic modules, Ford said. It did not identify the suppliers of the affected parts, but a spokeswoman said the parts needed for the F-150 and Edge vehicles are tied to basic functions, such as wiper motors and infotainment systems.

Ford will cancel the last-minute shift Thursday and both shifts Friday at its Louisville assembly plant, which makes the Ford Escape and Lincoln Corsair SUVs. Production is expected to resume in short shifts on Monday and full production the next day.

In Cologne, where the Fiesta car is built, the plant will be idle from March 1-16 and March 22. The company did not say what volume it was losing due to that action.

Reporting by Ben Klayman in Detroit; Edited by David Gregorio and Muralikumar Anantharaman


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