Ford began resuming vehicle production in the United States on May 18, 2020 with new coronavirus safety protocols such as health assessments, personal protective equipment, and changes to facilities to increase social distancing.
DETROIT – Ford Motor is significantly reducing production of its highly profitable F-150 pickup trucks due to a persistent shortage of semiconductor chips in the global automotive industry.
The automaker announced Thursday that its Dearborn, Michigan truck plant will decrease from three to one shift for one week starting Monday, while truck production at its Kansas City, Missouri assembly plant will decrease from three to two shifts. Ford spokeswoman Kelli Felker said both plants are expected to return in three shifts by the week of February 15.
“We are working closely with suppliers to remove potential production constraints related to the global semiconductor shortage and to prioritize key vehicle lines for production and make the most of our semiconductor allocation,” she said in a statement sent via email.
Ford shares appeared unaffected by the cuts, rising about 3% during intraday trading late Thursday morning. The automaker is expected to announce its fourth quarter results and forecast for 2021 after the market closed on Thursday.
Automakers and suppliers warned of a semiconductor shortage late last year after vehicle demand rose more than expected after a two-month shutdown of production facilities due to the coronavirus pandemic.
Semiconductors are extremely important components of new vehicles in areas that range from infotainment systems to more traditional parts like power steering. They are also used in consumer electronics.
Ford’s confirmed plans come a day after General Motors announced it would cease production at four assembly plants in Fairfax, Kansas, next week. Ingersoll, Ontario; and San Luis Potosi, Mexico. GM will also be operating a half capacity plant in South Korea this week.
Ford and other automakers – from Nissan Motor to Volkswagen – previously stopped vehicle production due to the shortage of chips.
Kumar Galhotra, Ford President for US and International Markets, described the chip shortage earlier this week as “a very dynamic situation”. He said the company had been working with its suppliers to reduce the impact on its plants and resolve the issue as soon as possible.
“It’s changing all the time, but we believe we will look into it for at least the first half of this year,” he told CNBC.