Ford slashes production due to semiconductor chip shortage

Business

(NewsNation Now) — Ongoing supply chain problems are forcing Ford Motor Co. to cut production at a number of its North American plants due to a shortage of semiconductor chips.

In an announcement last week, Ford said it plans to stop assembly at eight plants in Illinois, Michigan, Kentucky, Mexico and Canada. The automaker can’t get enough semiconductor chips for building vehicles because of supply chain shortages. However, Ford CFO John Lawler predicts the chip shortage will ease as the year goes on.

“We have disruptions right now from suppliers due to shutdowns from omicron as well as to other chip issues. But as we see us move through the second half of 2022. We see the chip crisis easing,” Lawler said.

The Bronco, F-150 and the Explorer will be affected by the production stop, which is set to take effect starting this week.

As the supply chain issues continue, the numbers continue to grow. The chip shortage has affected around a quarter of a million vehicles, and the price for these goods last year alone was $3 billion.

Used and new car prices are really skyrocketing. Ford reports the average price for one of its cars right now is $51,000.

Ford Motor Co. reversed a loss and rode some big accounting changes to post a $17.94 billion net profit last year, even as it battled computer chip shortages that caused factory slowdowns and vehicle shortages.

WAIT TIMES

The chip shortage isn’t only affecting Ford’s sales, it’s costing all dealers a lot of money and the American public a lot of money, too, especially if they’re in the market for a new car.

For most people, when you go to buy a car, chances are you need it right then and there or at the very least within a few days, or maybe a week or two.

But some buyers have been waiting and will still be waiting months due to the supply chain issues.

Here are the facts:

  • According to Ford, buyers looking to snag a brand new Ford Bronco may have to wait until 2023 even if they’ve already placed an order. This is due to a combination of demand and a lack of supply.
  • If you want a new Ford Maverick pickup, the company announced last month it’s not even taking orders for them until next summer.

A new study done by the analytics firm Growth from Knowledge found that 43% of Midwesterners said they would be willing to wait up to a year for the car of their choice. That’s compared to 30% of those surveyed in the Northeast. In that same study, it found that car buyers over the age of 45 are a bit more patient to wait for their dream car. Those younger ones want it now.

The Associated Press contributed to this report.

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