Ford Motor Company recently announced that it would shut down some of their factories amid the global chip shortage that has caused many problems for auto manufacturers. For months now, the world has experienced a global shortage of semiconductors, an essential car part, which has, in turn, left many auto manufacturers with problems producing new cars.
Ford is the latest auto manufacturer to have to close down certain parts of their facilities in order to ensure that this chip shortage doesn’t completely derail their business. Several Ford factories in North America are now set to close down for only a few weeks in July and August. After these few weeks, it is expected that these factories will get back to running normal schedules. They are not permanently closing.
Their Chicago facility is one factory that is set to close. This assembly plan makes the Explorer sport utility vehicles and will be closed from the week of July 5 to the week of July 26. It will reopen and run two shifts during the week of August 2. Their Kansas City facility will also be closed for a few weeks in the upcoming months, which will momentarily put a halt to their assembly of the F-150 pickup truck.
Ford previously said in April that the chip shortage could cost their business $2.5 billion this year alone. They also revealed that it could halve their vehicle production in the second quarter. While auto sales did well during the COVID-19 pandemic, sales have recently cooled down, which may allow Ford and other auto companies to breathe a little as they struggle to produce new cars amid this chip shortage.
Ford also recently announced that the Michigan facility that shipped its Bronco SUVs will be shut down for about two weeks in July. However, this latest assembly plant closure isn’t related to the chip shortage. Instead, the Michigan plant is closing due to a shortage of other types of auto parts.
Semiconductors have left auto manufacturers with many problems in producing new cars. However, there are so many material shortages affecting many industries, the auto industry included. Plus, recent supply chain issues have affected a variety of businesses globally.
All of these issues stem from the recent year of the COVID-19 pandemic. Many industries, auto manufacturers included, pivoted in various ways to help their business thrive during the pandemic. However, now many Americans are getting fully vaccinated. For the first time in a year, people are finally able to go out and get back to some semblance of “normal”.
As a result, many are spending money. This quick reopening of the U.S. economy has left many businesses scrambling to provide for the surge in consumer demand, which has left many businesses behind in various ways as a result. Material shortages haven’t yet been properly dealt with, and supply chain issues are keeping some businesses from reaching the post-pandemic goals they’d like to meet.
While many hope that these major issues will be dealt with by at least the end of the year, some economists warn that we may continue to see stressors from the pandemic well into 2022.