Driving along I-71 near Sparta, Kentucky, rows upon rows of Ford pickup trucks can be seen in parking lots, in full view. They aren’t ready for shipment to dealers, however, as critical components are missing. It’s just one example – a premonition, really – of how virtually every carmaker is significantly affected by the chip shortage in the automotive industry.
For Ford, these Super Duty trucks will be completed and sent to dealerships nationwide once the back-ordered modules are delivered to the Kentucky Truck Plant. When that will happen is unknown. When asked by the Detroit Free Press about the stockpile, Ford’s global manufacturing and labor communications manager, Kelli Felker, said, “Ford will build and hold the vehicles for a number of weeks, then ship the vehicles to dealers once the modules are available and comprehensive quality checks are complete.”
Although Ford has been one of the most transparent carmakers as production challenges deepen, the stock price took a hit after the earnings report despite extremely positive results to this point in the year. After earnings were posts, Ford CEO Jim Farley said, “The semiconductor shortage and the impact to production will get worse before it gets better.”
All carmakers working from behind
To date, it’s estimated that Ford has lost vehicle production to the tune of more than 362,000 units. General Motors and Renault Nissan Mitsubishi are similarly plagued at 326,000 and 285,000 units respectively, While VW, Stellantis, Toyota, and Honda are also deep into vehicle shortages.
As Ford builds vehicles and parks them until required modules arrive, other carmakers have taken the different approach of idling plants that may be less visible yet no less painful to the industry. General Motors has idled plants in Wentzville, MO, Spring Hill Assembly in Tennessee, Lansing Delta Township, Lansing Grand River, and at Ramos Assembly in Mexico.
Some shutdowns have been long-lasting too. The Fairfax Assembly Plant in Kansas has been idled since February 8 as has the CAMI Assembly Plant in Ontario, Canada, both of which have been extended to May 10.
An eventual remedy coming
Of the shortage, Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said, “This is a growing concern. Like COVID last year, from the beginning it seemed like it would go away in the near term but as the months go by, it’s growing into a bigger and bigger issue.
“It takes so long to get a plant up and running that’s dedicated to these particular chips. With the increased computerization of vehicles, these chips are the lifeblood. They operate the powertrain control unit, the infotainment. You can drive a car without the infotainment system but you can’t sell a car without an infotainment system. You can’t run an engine without certain chips. They’re the nerve center of different sections of the vehicle.”
Intel has committed to being part of the solution for the chip shortage with a timeline of around six to nine months to get up to speed, but CEO Pat Gelsinger says it could be a couple of years until the industry catches up with demand for chips.
The Renesas factory that was shuttered due to a fire this spring is hoping to resume production by July this year as well. While there is relief on the way, it will take some time to catch up, and those F-Series Super Duty trucks could be in Sparta awhile.
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