Chip shortages force more cuts at North American auto plants

Chips for use in cars and trucks have been harder to come by as semiconductor makers have allocated more capacity to consumer products.US automakers a
File photo used for representational purpose (Bloomberg)
File photo used for representational purpose

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US automakers are expanding production cuts at some North American plants as they cope with a worsening global shortage of semiconductors.

Chips for use in cars and trucks have been harder to come by as semiconductor makers have allocated more capacity to consumer products. The pandemic has caused a surge in orders for smartphones, TVs and computers as people try to make extended life at home more bearable, leaving less capacity for a stronger-than-expected rebound in vehicle demand.

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Consultant AlixPartners said the global chip shortage could cost automakers $61 billion in lost sales this year. Hau Thai-Tang, Ford Motor Co.’s chief product-platform and operations officer, sees conditions improving in the second quarter as wafer and chipmakers shift more production to automotive clients. “Then hopefully that will give us some ability to recover in the back half," of 2021, he said.

Also Read : General Motors extends vehicle production cuts due to chip shortage)

Here’s the current situation for the major auto manufacturers.

General Motors Co.

Feb. 9: GM said three North American plants will remain closed until at least mid-March, when the automaker will decide on possible restart dates for Fairfax, Kansas; Ingersoll, Ontario; and San Luis Potosi, Mexico. Factories in Ramos Arizpe, Mexico, and Wentzville, Missouri, have begun building vehicles without certain modules and will finish them when semiconductors become available, a company spokesman said.

The GM logo (REUTERS)
The GM logo (REUTERS)

Feb. 3: GM temporarily shut down three North American plants the week of Feb. 8. The Fairfax factory makes the Cadillac XT4 crossover, and the facilities in Ingersoll and San Luis Potosi build the Chevrolet Equinox small SUV, among other models.

Ford Motor Co.

Feb. 9: Like GM, Ford is building some models without chips and will install them later, before shipping the vehicles to dealers. Thai-Tang characterized the shortage that’s curtailing F-150 output for the week as “temporary" and said it won’t be a “long-term constraint" on output of the company’s most profitable product.

Feb. 4: Ford said it is cutting production of its biggest money maker, the F-150 pickup truck, at its Dearborn, Michigan, and Kansas City factories the week of Feb. 8. Dearborn will run one of three shifts, and Kansas City will run two of three.

Also Read : Honda, Nissan to sell a quarter of a million fewer cars because of chip shortage

Feb. 1: The Chicago plant that assembles the Ford Explorer and Lincoln Aviator SUVs ran one of three shifts for a week, and the Louisville, Kentucky SUV plant that makes the Ford Escape and Lincoln Corsair was temporarily closed. Ford also shuttered its Oakville, Ontario, plant for the week partly because of the semiconductor shortage.

Jan. 26-27: Ford shortened two shifts and canceled one shift at both the Dearborn and Kansas City F-150 plants.

Jan. 8: The company idled output at the Louisville SUV plant for a week.

Stellantis NV

File photo: Stellantis (AP)
File photo: Stellantis (AP)

Feb. 4: Stellantis, formed recently from the merger of Fiat Chrysler Automobiles NV and PSA Group, will idle a Canadian plant in Windsor, Ontario, that makes the Pacifica minivan for three weeks starting Feb. 8, according to Unifor, the union representing the plant.

Jan. 8: Stellantis said it would idle its Brampton, Ontario, factory, which makes the Dodge Charger and Challenger, for the month of January. It also extended downtime in January at the Toluca, Mexico, plant that makes the Jeep Compass.

Tesla Inc.

Feb. 8: “Increased demand for personal electronics has created a shortfall of microchip supply, and it is yet unknown how we may be impacted," Tesla said in its 10-K filing.

Jan. 27: Tesla is working to manage the global semiconductor shortage, which “may have a temporary impact" on production, Zachary Kirkhorn, the company’s chief financial officer, said during the fourth-quarter earnings call without providing details.

Toyota Motor Corp.

Jan. 9: Toyota cut output of its Tundra pickup truck, manufactured in San Antonio, Texas, by 40% in January, according to spokesman Scott Vazin. “Thus far only Tundra is impacted in North America."

Nissan Motor Co.

Feb. 5: Nissan plans to cut a day of production for the truck line at its Canton, Mississippi, facility on Feb. 8. The Japanese automaker already eliminated two days of Frontier and Titan output there on Jan. 22 and Jan. 25.

Honda Motor Co.

Feb. 5: Honda’s Ohio, Alabama, Indiana, Georgia and Canadian factories are handling the chip shortage “differently to maximize the supply of these critical parts," a spokesman said in an email. This includes “reducing production on certain days, but since it is a fluid situation, scheduled production adjustments could change."

Daimler AG

Feb. 5: The Mercedes-Benz plant in Tuscaloosa, Alabama, is currently “running as planned," a Daimler spokesperson said.


Feb. 5: The shortage hasn’t led to any disruptions at the BMW plant in Spartanburg, South Carolina, that assembles sport-utility vehicles. The German automaker ordered the necessary volume for 2021 on time and expects “suppliers to deliver according to contract in line with the orders," it said in a email.

Hyundai Motor Co.

Feb. 5: Hyundai is “closely monitoring the situation and collaborating with our supplier partners to maintain stable production," the company said in a statement.

First Published Date: 10 Feb 2021, 12:18 PM IST

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