Semiconductor Shortage Delays More Automobiles
The industry is having to stall more plants to contend with the semiconductor shortage that’s currently making it more difficult for you to get everything from a smartphone on up to your next vehicle. Ford Motor Co. recently informed employees that its Dearborn truck plant (easily one of its most profitable facilities) would need to be idled through the weekend to create a buffer for semiconductor chips. Worse yet, it’s not the first time the automaker has had to stall output of the F-150 this year. Ford has also started manufacturing trucks without all the necessary components, stating it would hold vehicles for a few weeks to account for supply chain delays.
Meanwhile, Chrysler has made a similar announcement about its minivan output as Windsor Assembly faces another chip deficit. Unifor Local 444 recently stated that the facility would be staring down the barrel of a four-week shutdown starting next week. Considering Chrysler’s minivans literally just dealt with a three-week stall over the chip shortage, union workers are understandably upset. Days earlier, General Motors Canada also announced that its CAMI plant in Ingersoll, Ontario, will likely remain idle until the middle of April.
But it’s been hard times for the industry in general. Following a lackluster 2020, this year started with numerous automakers confessing that the semiconductor shortage would be more impactful than they initially estimated. By February, analysts had gotten in on the action and started making varied predictions about the future. Though the present was deemed a mess by everyone and the rippling effect of lockdowns was presumably going to continue wreaking havoc on global supply chains.
“At this stage, while we anticipate a million vehicles will be delayed from production in the first quarter, we expect the industry to recover later in the year, with little expected risk to the full year forecast of 84.6 million units at this time. We are continuing to monitor, however, and the situation remains fluid,” stated Executive Director of Global Light Vehicle Production for IHS Markit Mark Fulthorpe.
While the IHS Markit analysis from last month is probably one of the more nuanced takes on the chip shortage, it doesn’t paint the rosiest of pictures. It suggests prolonged hardships affecting all manufacturers, with a late-year turnaround, allowing for the possibility of things getting much worse on the chip front through the second quarter. Asian firms appear to be better positioned than their Western counterparts, however, it’s becoming increasingly obvious that no manufacturer will emerge unscathed.
Ford’s latest action lends itself to a previous forecast that the chip shortage could burn roughly $1 billion to $2.5 billion off this year’s estimated profit. Considering that the automaker stalled numerous facilities since the start of 2021 (often impacting the all-important F-Series), we’re willing to believe those figures.
Blue Oval plans on having Dearborn closed from Friday through Sunday, though it’s not just the F-150 being impacted. The automaker has had to slow production of the Transit, Escape, EcoSport, and Edge. While other models have also been impacted, Ford claims those shorts represented negligible production losses.
GM’s latest announcement impacts Chevrolet Equinox production. But the company has also confirmed output will be suppressed for the Chevy Colorado and GMC Canyon (starting on Monday) due to stalls at Wentzville Assembly Center until April 5th. Lansing Grand River Assembly has also seen closures extended through April 12th, impacting volume for the Camaro and Cadillac’s sedans.
[Images: Ford Motor Co.]