Ford outlines further production cuts due to global chip shortage

FILE PHOTO: A Ford 2018 F150 pick-up truck moves down the assembly line at Ford's Dearborn Truck Plant during the 100-year celebration of the Ford River Rouge Complex in Dearborn, Michigan U.S. September 27, 2018. REUTERS/Rebecca Cook/File Photo

By Ben Klayman

DETROIT (Reuters) – Ford Motor Co on Wednesday outlined another series of plant shutdowns due to the global semiconductor chip shortage, with five facilities in the United States and one in Turkey affected.

The No. 2 U.S. automaker did not outline how many vehicles would be lost in the latest actions, and reiterated it intends to provide an update of the financial impact of the chip shortage at its quarterly earnings on April 28.

The firm this month announced production cuts at plants in Chicago, Flat Rock, Michigan, and Kansas City, as well as implementing a reduced schedule at its Ohio Assembly Plant, the latest in a string of chip-related curtailments.

Ford said in March it expected the semiconductor shortage to cost between $1 billion and $2.5 billion.

The company said in addition to the chip shortage, other factors driving the shutdowns included the previously reported fire at Renesas Electronics Corp’s chip-making factory in Japan, and prior severe winter storms in Texas.

Industry officials have previously said the shortage would be worse in the second quarter than in the first.

It was not clear if supplies would recover in the third quarter and whether automakers could make up all the lost production later this year.

Many North American automakers cancelled chip orders after plants were shut for two months during the COVID-19 pandemic last year, while demand surged from the consumer electronics industry as people worked from home and played video games.

That has now left carmakers competing for chips.

Semiconductors are used extensively in cars, including to monitor engine performance, manage steering or automatic windows, and in sensors used in parking and entertainment systems.

(Reporting by Ben Klayman in Detroit; Editing by Chris Reese and Jan Harvey)

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