Ford Halts Production at 4 Plants Due to Chip Shortage for New Vehicles

Ford has announced the temporary halting or altering of production at four North American production plants as the shortage of computer chips continues to hamper the supply chain of parts needed to make new cars.

The shortage of semiconductor computer chips has hampered production of cars and dozens of other products that use the chips, from medical equipment like pacemakers to laptops and gaming consoles, causing shortages of the products worldwide.

Now, production at some Ford plants is being halted for at least a week at facilities in Chicago and Mexico, as well as slowing production and reducing shifts at facilities in Kansas City and Dearborn, Michigan, according to CNN Business.

Other plants that are temporarily halting production are in Wayne, Michigan, Missouri and Mexico, according to the Chicago Sun-Times, and the vehicles affected include the Ford F-150, Bronco, Ranger and Mustang Mach-E, the Sun-Times reported.

The move was announced February 4, a day after Ford announced earnings for 2021 that fell short of expectations, causing a dip in the company's stock price, according to CNBC.

Last month, the Commerce Department said the low supply of semiconductor computer chips could lead to temporary factory closures across the U.S. The department also called on Congress to pass over $50 billion in funding to invest in the production of the semiconductors on U.S. soil to decrease reliance on foreign production and the supply chain that has been disrupted by COVID.

Last week, the company announced an income of $17.9 billion over the full year of 2021, recovering from the $1.3 billion loss it posted in 2020. Ford CEO Jim Farley also stated in last week's annual report that the company planned to double its electric vehicle manufacturing capacity by 2023 and intends for electric vehicles to represent at least 40 percent of its products by 2030.

The shutdown affects nearly 6,000 employees at the Chicago facility, many of whom are covered in a United Auto Workers contract, and the union said the contract plus state unemployment benefits could see the workers make about 75 to 80 percent of their normal income during the closure, according to the Chicago Sun-Times.

CNN Business reported that the Kansas City and Dearborn facilities will operate on one shift per day instead of the usual two or three, respectively, and they will continue to produce Ford Transit vans and F-150 pickup trucks, respectively.

However, Ford executives told investors last week that they are optimistic that global production volumes will increase by 10 to 15 percent overall in 2022, despite likely shortages continuing into the first quarter, according to The Detroit News

A request for comment by Newsweek was not immediately returned by Ford.

Update 2/7/2022 2:30 p.m.: This story has been updated to add context of the shutdowns and the shortage of computer chips at large.

Chicago Assembly Plant, Ford Motor Company
Four North American Ford plants will halt or reduce production of new vehicles due to a shortage of computer chips. Above, vehicles produced by Ford Motor Company are situated along a conveyor belt at its Chicago Assembly Plant in June 2019. Scott Olson/Getty