Ford Motor Co. canceled its Thursday night shift and both shifts today at its Louisville Assembly Plant, in Kentucky, due to a shortage of semiconductors. The plant assembles the Ford Escape and Lincoln Corsair. The shifts in Louisville will resume with full production on Tuesday.
In addition, Ford is building its F-150 trucks and Edge SUVs in North America without certain parts that contain some electronic modules. These vehicles will be held until the modules are available and comprehensive quality checks are complete.
Ford had predicted in its financial update that if the semiconductor shortage continued into the first half of 2021, the shortage would adversely affect Ford production and its earnings before interest and taxes, to the tune of between $1 billion and $2.5 billion, with some production being made up in the second half of the year.
Semiconductors are the brains behind an increasing range of products, from computers to phones to refrigerators. In the automobile industry, they control dozens of circuits, including air bags, power windows, catalytic converters, dashboard displays and more.
When the COVID-19 pandemic hit, auto manufacturers shuttered plants, and this pause in production hit auto suppliers as well, including semiconductor manufacturers who slowed production of the chips used in the automotive industry.
At the same time, as employees across multiple industries started working remotely, the need for more electronics, such as laptops and monitors, kicked off a buying spree, which led to chip manufacturers ramping up production on the chips used in those type of products.
While the COVID-19 pandemic and the most recent severe weather in Texas are contributing factors of the current shortfall, they are not the main root of the problem. The use of semiconductors in an ever-growing list of products is putting strain on current semiconductor factories. In addition, new semiconductor factories are among some of the most complex manufacturing facilities to build, often taking years to construct.