The global semiconductor chip shortage is taking a significant toll on the auto industry as of late, as automakers are forced to shut down production facilities due to the missing components. Last week we learned that several automakers have asked President Joe Biden to get involved in trying to solve the issue. More specifically, the companies are pushing the federal government to issue a mandate that would see silicon suppliers being tasked with setting aside automotive-grade materials to quell the issue. While we wait for such a mandate to come into play, Detroit’s automakers are dealing with different levels of the shortage. Thanks to some new reports, we know that the Ford F-150 is facing more delays, and General Motors is in a different boat entirely. Here’s what you need to know.
According to a new report from Automotive News, the Ford Motor Company is once again being forced to close production facilities across the country in order to cope with the semiconductor chip shortage. The news comes by way of an internal memo obtained by the publication, which provides details on the specific closures ahead. Ford has told their employees that their Chicago and Flat Rock facilities will now both face closures during the weeks of April 19 and April 26. These facilities were not included in the initial shutdown announcement at the beginning of the month. The automaker is also extending the closure of the Kansas City Assembly plant during that same timeframe, including the Transit van line which was not initially slated to close. Crucially, this plant is also one of the facilities responsible for Ford F-150 production, the company’s most profitable vehicle.
The memo also notes that the Louisville and Avlon Lake facilities will be impacted. The Kentucky truck plant will close entirely during the weeks of April 26 and May 3, and will lose overtime shifts from May 8 to May 31. At the Ohio plant, workers will only be tasked with producing Super Duty chassis cabs and the larger medium-duty trucks during the weeks of April 19 and April 26. These vehicles are important for the Blue Oval’s bottom line, but not nearly as crucial as the Ford F-150.
“We know it’s difficult not knowing your specific work schedules in the weeks ahead,” said Ford’s vice president of manufacturing and labor affairs John Savona in the memo obtained by Automotive News. “We appreciate your continued flexibility and commitment to delivering high-quality vehicles for our customers and dealers.”
Industry analysts at AutoForecast Solutions are estimating that Ford has faced a reduction in production by as many as 408,000 vehicles due to the semiconductor chip shortage. The actions announced in the memo yesterday are said to account for the loss of 91,300 vehicles alone. Ford has estimated that they will see a loss of profits around $1 billion to $2.5 billion for 2021 due to the shortage. Much of this will have to do with Ford F-150 production being reduced.
As bad as things look over in Dearborn, General Motors appears to be coping a bit better. According to a new report from The Detroit News, General Motors has been able to mitigate some of the impact of the chip shortage by shoring up their supply chain. This has resulted in the automaker walking back some of their initial shutdowns early, including at the Spring Hill Assembly and Ramos Assembly plants. GM initially announced that they would be closing the Spring Hill Assembly plant, which produces the GMC Acadia, Cadillac XT5 and XT6 models, for two weeks starting April 12. That shutdown has been shortened to just one week, with production resuming on April 19. Production of the Chevrolet Blazer at the Ramos Assembly plant in Mexico is also no longer slated to go off-line starting April 19. A better result that what the Ford F-150 is dealing with undoubtedly.
“Following our announcement last Thursday, April 8, GM’s supply chain organization has made strides working with our supply base to mitigate the near-term impacts of the semiconductor situation on both Spring Hill Assembly and Ramos Assembly,” said General Motors spokesman David Barnas in a statement to The Detroit News.
So then Ford and General Motors are facing different realities during the end of April as it relates to the semiconductor chip shortage. Of course we aren’t quite done with this yet, and issues could continue to persist in the coming months. Automakers already faced a tough 2020 due to the pandemic, and were likely hoping that things would turn around in 2021. This has to be especially true for the Blue Oval, who released their new Ford F-150 generation for the 2021 model year. Even with a mandate however, loss in profits for the year are an inevitability.