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Ford To Idle Two Plants Due To Chip Shortage And Assembly Some Vehicles Without All Parts

Ford To Idle Two Plants Due To Chip Shortage And Assembly Some Vehicles Without All Parts
In addition to stopping production at two factories because of the global ship shortage, Ford Motor Co will also not be able to fit certain parts in the assembly of its flagship, highly profitable F-150 pickup trucks and Edge SUVs in North America for now, the company has said.
A spokeswoman for the United States based auto maker said that a combination of shortage of chip as well as the lack of supply of a car part because of the central US winter storm has prompted it to assemble the vehicles and then hold them “for a number of weeks” till such times that they can be completed and shipped.  The company said that the vehicles affected by these shortages are in the “thousands”.
Production at plants in Louisville, Kentucky, and Cologne, Germany are being suspended by the company, Ford also said.
The Dearborn, Michigan-based company had previously forecast profits for the current year could be hit by $1 billion to $2.5 billion because of the global chip shortage which essentially covers the costs associated with these latest announced actions, the company said.
A combination of factors is responsible for the chip shortage which has hit auto makers all over the world. The Covid-19 pandemic forced car makers to shut plants for two months last year as well as cancelling chip orders. At the same time, there was a global surge in demand for chips because of surge in sale of consumer electronics with people all across the world were forced to stay back home to work, or study or play games for entertainment. But now car makers are competing for those hips.
Production shifts for building the full-size F-150 trucks were cut last month by Ford which was a measure that was announced by the company after it cut production cuts for other vehicles too because of the chip shortage. The company has also said that it will prioritize and allocate chips to its highest-margin vehicles when it can.
A fuel management module that essentially added a mile per gallon to fuel economy, will nit not be fitted in some of its light-duty full-size pickups, said General Motors Co on Monday. The shortage of chip globally will result in a loss of up to $2 billion from the profits of GM this year, the company had said previously. 
Some electronic modules with the scarce chips will be among the Ford trucks and SUVs being assembled without certain parts, the company said. The suppliers who are currently unable to meet Ford’s demands for parts were not named by the car maker. However parts required for some basic functions, such as windshield wiper motors and infotainment systems, would be affected by this supply shortage, said spokeswoman of the company.

Christopher J. Mitchell

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