Ford forced to cut profitable F-150 pickup truck production due to semiconductor chip shortage

Ford began resuming automobile production within the U.S. on May 18, 2020 with new coronavirus security protocols akin to well being assessments, private protecting gear and facility modifications to improve social distancing.


DETROIT — Ford Motor is considerably slicing production of its extremely profitable F-150 pickup vans due to an ongoing semiconductor chip shortage plaguing the worldwide automotive trade.

The automaker stated Thursday that its Dearborn Truck Plant in Michigan will drop to one shift from three for per week starting Monday, whereas truck production at its Kansas City Assembly Plant in Missouri will drop to two shifts from three. Ford spokeswoman Kelli Felker stated each vegetation are anticipated to return to three shifts the week of Feb. 15.

“We are working closely with suppliers to address potential production constraints tied to the global semiconductor shortage and working to prioritize key vehicle lines for production, making the most of our semiconductor allocation,” she stated in an emailed assertion.

Shares of Ford appeared to be unaffected by the cuts, buying and selling up by about 3% throughout intraday buying and selling late Thursday morning. The automaker is scheduled to report its fourth-quarter earnings and provides steering for 2021 after the market closes Thursday.

Automakers and components suppliers started warning of a semiconductor shortage late final yr after demand for autos rebounded stronger than anticipated following a two-month shutdown of production vegetation due to the coronavirus pandemic.

Semiconductors are extraordinarily vital elements of recent autos for areas starting from infotainment programs to extra conventional components akin to energy steering. They’re additionally utilized in client electronics.

Ford’s confirmed plans come a day after General Motors stated it will take down production subsequent week at 4 meeting vegetation in Fairfax, Kansas; Ingersoll, Ontario, and San Luis Potosi, Mexico. GM may also run a plant in South Korea at half capability that week.

Ford and different automakers — from Nissan Motor to Volkswagen — have beforehand cut automobile production due to the chip shortage.

Kumar Galhotra, Ford president of the Americas and worldwide markets, described the chip shortage earlier this week as a “very dynamic situation.” He stated the corporate has been working with its suppliers to mitigate influence to its vegetation and resolve the problem as rapidly as potential.

“It’s changing all the time, but we think we will be dealing with it for at least the first half of this year,” he informed CNBC.

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