Ford Motor Company announced another round of plant closure on Wednesday, as a result of the global semiconductor chip shortage, this time affecting five facilities in the United States and one in Turkey.
The No. 2 automaker in the United States did not say how many vehicles would be missing as a result of the latest measures, but it did say it plans to provide an update on the financial effect of the chip shortage with its quarterly earnings on April 28, implying the hit may be greater than anticipated.
Ford estimated the expense of the semiconductor shortage to be between $1 billion and $2.5 billion in March. Although the company has prioritised chips for its most profitable vehicles, it has been forced to halt production of its best-selling F-150 full-size pickup on occasion, and it has parked some of those trucks for final assembly when enough chips are available.
The Dearborn, Michigan-based company announced production cuts at its Chicago, Flat Rock, Michigan, and Kansas City facilities, as well as a reduced schedule at its Ohio Assembly Plant, during the weeks of April 19 and 26. This is the latest in a series of chip-related curtailments.
It also scheduled downtime for its truck plant in Louisville, Kentucky, between April 26 and May 3, as well as its van plant in Golcuk, Turkey, between May 8 and May 31. Ford, on the other hand, aims to cover some of the losses in Turkey by deferring planned maintenance until later in the year.
Semiconductors are widely used in automobiles, for example, to track engine performance, control steering or automatic windows, and in sensors for parking and entertainment systems other factors driving the shutdowns, according to Ford, were a recently recorded fire at Renesas Electronics Corp's chip-making factory in Japan, as well as recent heavy winter storms in Texas.
Ford lost nearly 408,000 vehicles due to the shortage, according to industry research firm AutoForecast Solutions, with Wednesday's activities accounting for more than 91,300 of that number. Also on Wednesday, Nissan announced that its plants in Smyrna, Tennessee, Canton, Mississippi; and Aguascalientes, Mexico, will be closed in April due to the shortage.
Due to the chip shortage and other factors, Honda Motor Co. of Japan said it may cut production at some of its North American plants on April 19, describing the situation as fluid. On Wednesday and Thursday, Volkswagen AG's Puebla, Mexico, plant halted development of the Tiguan crossover vehicle.
Officials in the industry have already stated that the shortage would be higher in the second quarter than it was in the first. Ford's larger U.S. competitor, General Motors Co, previously estimated that the chip shortage would cost the company up to $2 billion in profit. It was unclear if chip stocks would rebound in the third quarter, or whether automakers would be able to make up for lost demand later that year.
After plants were shut down for two months last year due to the COVID-19 pandemic, several North American automakers cancelled chip orders, while consumer electronics industry demand soared as people worked from home and played video games.