Ford Motor plans to suspend or reduce production at eight of its factories in the United States, Mexico and Canada over the next week due to chip supply constraints, Reuters reported.
Production will be suspended at factories in Michigan and Chicago in the United States, and in Cuautitlán, Mexico. In Kansas City, production of its F-150 trucks will be idled while a production shift of its Transit trucks will run, a Ford spokesman told Reuters.
The firm will also reduce work hours at its factories in Dearborn, Kentucky and Louisville, while eliminating overtime at its Oakville factory in Canada.
The changes come after the automaker released its financial results last week, which were lower than expected. Ford’s profit translated to $12.3 billion in the fourth quarter. This figure received a big boost from an accounting profit of $8.2 billion from the company’s investment in electric vehicle maker Rivian. Although excluding one-off items, earnings per share disappointed analysts.
In presenting its results, Ford forecast its 2022 operating profit to rise as much as 25%, driven by North American demand and a strong environment for vehicle prices.
However, major auto chipmakers such as NXP and Infineon expect supply shortages to persist despite increased output.
Differing perspectives on the most pressing problem facing the auto industry prolong uncertainty over its recovery from the coronavirus pandemic, and risk slowing efforts to transition to new chip-intensive technologies such as electrification and driving support.
The chip shortage cost the global auto industry some $210 billion in revenue and lost production of 7.7 million vehicles in 2021, according to an estimate by AlixPartners.
With information from Reuters and AFP.
