POST-PANDEMIC EFFECT: FORD CUTTING DOWN PRODUCTION VOLUME

 Ford Cutting Down Production Volume due to Pandemic Effect

Ford cut production of the nation's top-selling pickup and Ford's most profitable vehicle: The F-150. The automaker is dropping one shift from its truck plants in Dearborn, Michigan, and Kansas City, Missouri, with both sites expected to resume full production starting on 15 February 2021. Ford's headache caused by the shortage has now grown into a migraine as deliveries of the redesigned F-150 dropped 5% in January.

In February 2021, it was already predicted that the chip shortage would dent global car industry production by about 672,000 vehicles in the first quarter, with problems lingering into the fall. Also, the lead times for chips used in the auto sector typically are 26 weeks.

Ford forced to cut profitable F-150 pickup truck production due to semiconductor chip shortage

  • Ford is cutting production at plants in Missouri and Michigan that produce its profitable F-150 pickup trucks due to a global semiconductor chip shortage
  • The shortage began impacting the global automotive industry in late 2020
  • Semiconductors are extremely important components of new vehicles, for areas ranging from infotainment systems to more traditional parts such as power steering
  • Ford has cut production schedules for several SUV models, including the Explorer, built at its factory in Chicago

Read More:- https://www.pukkapartners.com/insight/post-pandemic-effect-ford-cutting-down-production-volume

Impact In Sales :-

The only thing that impacts F-Series sales is if Ford, for some reason, cannot make enough trucks to meet demand (That happened in March). The pandemic forced automakers to stop making vehicles for a brief time and subsequently affected Ford's North American profits.

It is a global shortage of semiconductor chips affecting Ford (and others), forcing the automaker to cut production at the Dearborn Truck Plant in Michigan from three shifts to one for a week beginning on 8 February 2021. The Kansas City Assembly Plant in Missouri will go down to two shifts, idling the third. Both plants will return to three shifts the week of 15 February 2021.

Ford previously shut down a plant in Louisville, Kentucky, which makes the Ford Escape and the Lincoln Corsair for a week and a facility in Germany for a month.

Automakers and parts suppliers began warning of a semiconductor shortage late last year after demand for vehicles rebounded stronger than expected following a two-month shutdown of production plants due to the coronavirus pandemic.

Ford's confirmed plans come a day after General Motors (GM) said it would take down production next week at four assembly plants in Fairfax, Kansas; Ingersoll, Ontario, and San Luis Potosi, Mexico. GM will also run a plant in South Korea at the half capacity that week.

From Nissan Motor to Volkswagen, Ford and other automakers have previously cut vehicle production due to the chip shortage.

Kumar Galhotra, Ford president of the Americas and international markets, described the chip shortage earlier this week as a "very dynamic situation." He said the company has been working with its suppliers to mitigate its plants' impact and resolve the issue as quickly as possible. Also, he said that it's changing all the time, but we think we will be dealing with it for at least the first half of this year.

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