Ford Motor Co. announced on Wednesday a series of plant closures due to the global shortage of semiconductor chips, affecting six facilities: five in the United States and one in Turkey.
The second-largest U.S. automaker did not specify how many vehicles would be lost with the latest actions and reiterated its intention to provide an update on the financial impact of the chip shortage with its quarterly earnings on April 28, suggesting that the impact could be greater than initially anticipated.
In March, Ford estimated that the semiconductor shortage would cost between $1 billion and $2.5 billion. While the company has prioritized chips for its higher-margin vehicles, it has occasionally been forced to idle production of its best-selling full-size F-150 truck and has parked some of those trucks for final assembly later, when enough chips are available.
The Dearborn, Michigan-based company announced production cuts this month during the weeks of April 19 and 26 at plants in Chicago, Flat Rock, Michigan, and Kansas City, along with implementing a reduced schedule at its Ohio Assembly Plant.
It also scheduled downtime for its truck plant in Louisville, Kentucky, during the weeks of April 26 and May 3, and its van plant in Golcuk, Turkey, from May 8 to 31. However, Ford expects to offset some losses in Turkey by moving up scheduled downtime later in the year.
Semiconductors are widely used in automobiles, including monitoring engine performance, managing steering or automatic windows, and in sensors used in parking and entertainment systems.
Ford mentioned that, in addition to the chip shortage, other factors contributing to the closures included the previously reported fire at Renesas Electronics Corp’s chip manufacturing factory in Japan and severe winter storms in Texas.
AutoForecast Solutions estimated a production loss of nearly 408,000 vehicles for Ford due to the shortage, and Wednesday’s actions account for more than 91,300 of that total.
On the same day, the Japanese Nissan Motor Co announced downtime in April for its plants in Smyrna, Tennessee; Canton, Mississippi; and Aguascalientes, Mexico, due to the shortage.
The Japanese Honda said it might cut production at some of its North American plants in the week of April 19 due to chip shortages and other factors, characterizing the situation as “fluid.” The German automaker Volkswagen halted production of its Tiguan crossover vehicle at its Puebla, Mexico plant on Wednesday and Thursday.
Industry officials had previously stated that the shortage would be worse in the second quarter than in the first. Ford’s biggest U.S. rival, General Motors Co, previously mentioned that it expected the financial impact of the chip shortage to reduce earnings by up to $2 billion.
It remains unclear whether chip supplies will recover in the third quarter and whether automakers will be able to make up for all the lost production by the end of this year.
Many North American automakers canceled chip orders after plants shut down for two months during the COVID-19 pandemic last year, while demand surged in the consumer electronics industry as people worked from home and played video games. This has left automakers competing for chips.
