News: Ford to partly assemble some vehicles, idle two plants due to global chip shortage.
DETROIT (Reuters) – Ford Motor Co announced Thursday that the company will initially assemble its highly profitable F-150 pickup trucks and Edge SUVs in North America with no specific parts and will idle two assembly plants due to the global shortage of semiconductor chips.
The US automaker said the chip shortage coupled with the shortage of a part caused by the central US winter storm led it to build the vehicles and then hold them for “a few weeks” until they were completed and can be delivered. The affected vehicles are among the “thousands,” said a spokeswoman.
Ford said production is also idling at plants in Louisville, Kentucky and Cologne, Germany.
The costs associated with these measures are being covered in the Dearborn, Michigan-based company’s previous forecast that earnings could increase by $ 1 billion to $ 2.5 billion this year due to chip shortages.
The shortage that has hit automakers around the world is due to a confluence of factors. Automakers closed plants and canceled chip orders for two months during the COVID-19 pandemic last year. Meanwhile, demand for chips from the consumer electronics industry was suppressed as people worked from home and played video games. Now the automakers have to fight for chips.
Last month, Ford cut shifts at two plants that build the full-size F-150 trucks. This followed the production cuts in other vehicles. Like other automakers, Ford has announced that it will prioritize its highest-margin vehicles and allocate chips when possible.
On Monday, General Motors Co announced that it is building some full-size lightweight pickups with no fuel management module, saving one mile per gallon of fuel. GM previously said the chip shortage could cut this year’s earnings by as much as $ 2 billion.
The Ford trucks and SUVs that are assembled without certain parts contain some electronic modules with the scarce chips, Ford said. No suppliers of the affected parts have been identified, but a spokeswoman said those for the F-150 and Edge vehicles required parts are tied to basic functions such as windscreen wiper motors and infotainment systems.
Ford is canceling the late shift on Thursday and both shifts on Friday at its Louisville assembly plant that builds the Ford Escape and Lincoln Corsair SUVs. Production is expected to resume in short shifts on Monday and in full production the next day.
In Cologne, where the Fiesta car is built, the plant will be idling from March 1st to 16th and March 22nd. The company did not disclose what volume was lost as a result of this action.
Reporting by Ben Klayman in Detroit; Adaptation by Leslie Adler, Cynthia Osterman and David Gregorio
Original Source © Reuters