Ford Motor is significantly cutting production at six plants in North America due to an ongoing global shortage of semiconductor chips, including facilities that produce highly profitable pickup trucks.
The actions vary by plant but range from overtime shift cancellations to facilities being closed for up to three weeks from April through June. Or a combination of both.
The impacted plants are in Illinois, Ohio, Kentucky, Michigan, Missouri and Ontario, Canada. They produce an array of products – from F-150 pickups and vans to the Ford Explorer SUV and Ford Escape crossover.
Production of the F-150 in Dearborn, Michigan will be down the weeks of April 5 and April 12, the company said. Ford also is canceling overtime shifts at the plant the weeks of April 26, May 10, May 31 and June 21. Another plant in Missouri that produces the full-size F-150 will be idled for a week starting Monday. Overtime shifts at the plant are being terminated for eight weeks through most of June.
Ford started resuming vehicle production in the U.S. on May 18, 2020 with new coronavirus safety protocols such as health assessments, personal protective equipment and facility modifications to increase social distancing.
Ford previously said it expected the shortage could lower its earnings by $1 billion to $2.5 billion in 2021. Without releasing any new guidance, the company said it “will provide an update on the financial impact of the semiconductor shortage” when it reports its first quarter earnings on April 28.
Semiconductors are key components used in the infotainment, power steering and braking systems of new vehicles, among other things. As multiple plants shut down last year due to Covid, suppliers directed semiconductors away from automakers to other industries, creating a shortage after consumer demand snapped back stronger than expected.
Consulting firm AlixPartners estimates the chip shortage will cut $60.6 billion in revenue from the global automotive industry this year. The shortage is impacting every automaker differently.
Ford’s Oakville Assembly in Canada, which produces the Ford Edge crossover, will be down for three weeks beginning the week of April 12 – the longest of any of the plants. Another facility in Kentucky that produces the Ford Escape and Lincoln Corsair will be down beginning that then for two weeks.
Other plants that produce the Ford Explorer and Lincoln Aviator SUVs, Ford Transit and E-Series vans and medium-duty trucks and chassis cabs will have overtime shifts eliminated.
Correction: This article was updated to reflect that Ford is cutting production at six plants. A previous version of this article misstated the number of plants.