Ford’s Flat Rock Assembly Plant will take a week off due to ongoing supply-chain issues stemming from the global semiconductor shortage. The plant, which is responsible for Mustang production is scheduled to come back online next week. Unfortunately, it’s a simple game of triage. With the Mustang being one of Ford’s lowest volume products whatever supply of semiconductors the automaker does have on hand are quickly siphoned towards F-150 production in order to keep the cash cow happy.
The report from the The Detroit News indicates Ford isn’t the only automaker still dealing with the fallout of the shortage. Toyota recently announced its plans to scale back production targets for February by some 150,000 vehicles. Stellantis previously said Canadian facilities in Brampton and Windsor, Ontario would be down this week, along with its Toluca and Saltillo van assembly plants in Mexico. Although Stellantis cited a lack of demand as motivation.
Shortages of key semiconductors have cost the global automotive industry hundreds of billions of dollars in lost revenue due to millions of vehicles either being unable to be produced or unable to be sold because of the lack of key hardware required for automated and electronic features. This new production cut to Mustang production is the latest indication the shortage will continue to drag on with no imminent end in sight. The lack of vehicles has left dealer lots empty and caused the prices of used vehicles to skyrocket.
Late last year Ford announced plans to join forces with GlobalFoundries in order to shore up the company’s long-term supply of semiconductors. However, that plan means absolutely nothing in the interim. The latest idling of Mustang production at Flat Rock has its roots in the early days of the pandemic as Ford and other automakers made the mistake of canceling crucial semiconductor orders from suppliers.
At the time, chip suppliers were happy to shift this newly freed production capacity towards other products required to meet the spiking global demand for TVs, laptops, cell phones, and other wares induced by stay-at-home orders. The chips required by the rest of the global economy are far more sophisticated, higher-margin, higher-volume than those required for vehicle production.
Global auto production was down 11.3 million vehicles in 2021 due to the chip shortage. It’s thought 7 million vehicles could be lost in 2022, and a further 1.6 million the year after. Some sources even believe the supply chain could be distorted until 2025 at the earliest.