Ford affected by the semiconductor crisis: the carmaker’s drastic decision

Ford plans to suspend or reduce production at eight of its plants in the United States, Mexico and Canada over the next week due to the semiconductor crisis.

The changes come a day after the Detroit-based carmaker warned that a lack of chips would lead to a drop in vehicle volume this quarter.

Production at factories in Michigan, Chicago and Cuautitlan, Mexico will be suspended. In Kansas City, the production of its F-150 vans will be stopped, while a shift will work for the production of its Transit vans.

The Detroit-based carmaker will also have a single shift or part-time shift at its factories in Dearborn, Kentucky and Louisville, while eliminating overtime at its Oakville plant in Canada.

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All changes will take effect for the week beginning February 7th.

Problems for Ford

Ford shares fell after the carmaker posted lower-than-expected quarterly revenues and forecast a slower recovery in vehicle production in 2022 than rival General Motors.

However, the company said it expects the volume of vehicles to improve significantly in the second half.

Ford has partnered with US chip maker GlobalFoundries to reduce its reliance on Taiwan’s TSMCs for older technology chips, which Ford CEO Jim Farley described as “feature-rich”.

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“We are very dependent on TSMC for our feature-rich nodes. Obviously, capacity is in jeopardy over time, as the industry moves to more advanced nodes, including us, ”Farley said at a conference.

“I learned a lot from the lesson that we can’t manage the supply chain for these key components the way we did,” he said, adding that the supply chain is critical to the transition to vehicle electrification and digitization.

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