Ford Motor suspends, reduces production at 8 factories over chip shortage

Ford Motor Company is planning to temporarily stop or reduce production in eight of its plants located in the United States, Canada, and Mexico. The suspensions will run throughout next week, and the automaker cited chip shortage as the reason.

According to Reuters, the plan was revealed just a day after it issued a warning that chip supply shortage may result in lower vehicle volume in the current quarter. Ford Motor is suspending production works in its plants in Michigan, Cuautitlan, Mexico, and Chicago while in Kansas City, the production of its F-150 pickup trucks will be reduced, and only one shift for the building of its Transit vans has been scheduled.

In addition, Ford Motor will also implement a single shift at its factories in Louisville, Dearborn, and Kentucky. In its Oakville, Canada factory, the automaker will suspend all overtime work schedules. It was reported that all changes in the production are set to take effect on Feb. 7.

Fox Business reported that this announcement coming from a major American automaker shows the continuous effect of the supply-chain setbacks that have been happening for a long time now. And this is not only happening in the U.S. but worldwide. National economies have also been affected by the chip shortage that has not been resolved yet despite the efforts of chipmakers.

At any rate, Ford Motor warned that the unavailability of semiconductor parts is likely to hurt the company's current financial quarter. It was mentioned on CNBC that aside from the F-150 pickup trucks, the other vehicle models that will be affected by the suspension or reduced production shifts are the Explorer SUVs., Bronco, Ford Mustang Mach-E crossover electric vehicle, Lincoln Aviator, and Ranger pickups.

"As we see us move through the second half of 2022, we see the chip crisis easing," John Lawler, Ford's chief financial officer, told Maria Bartiromo in an exclusive interview on Fox Business' "Mornings with Maria." "That is why we are confident in our volumes in 2022 being up about 10 to 15%."

Lawler further said that the chip shortage coupled with the impact of the pandemic's omicron variant have punched a hole in Ford Motor's fourth quarter, but they may soon get back as the chip crisis eases up.