Ford says chip shortage will force it to halt or cut production at 8 plants

 Source:

https://www.foxbusiness.com/markets/ford-chip-shortage-halt-cut-production-plants-jobs

"Ford CFO John Lawler says the company is ‘confident’ volumes and earnings will be up 10 to 15% as the semiconductor shortage mitigates.

Difficulties in obtaining semiconductor chips will prompt Ford Motor to temporarily halt or scale back auto production at eight plants in North America, the company said Friday, according to reports.

The announcement by the major U.S. automaker – set to take effect next week -- continued a series of supply-chain setbacks that have affected the nation’s economy in recent months.

Ford had warned Thursday that a lack of chip availability would likely hurt production in the company’s current financial quarter, Reuters reported.

Plants expected to see work suspended by Ford’s decision include those in Michigan, Chicago and Cuautitlan, Mexico, according to Reuters.

Also affected will be plants in Kentucky and Oakville, Ontario, Canada, Reuters added.

In Kansas City, production of Ford’s popular F-150 pickup trucks will be scaled back as one shift produces Transit vans, the news outlet reported.

Other models of Ford vehicles affected by the move include Bronco and Explorer SUVs, Ranger pickups, the Ford Mustang Mach-E electric crossover vehicle and the Lincoln Aviator, CNBC reported.

On Thursday, Ford missed Wall Street’s earnings expectations, causing shares to drop nearly 10% on Friday, the CNBC report said.

Earlier Friday, Ford Chief Financial Officer John Lawler appeared on Fox News’ "Mornings with Maria," where he said the company expected the semiconductor shortage to ease later in 2022.

"That's why we're confident in our volumes in 2022 being up about 10 to 15%," Lawler said."

A rebound in production could help bring down auto prices that have been affected by inflation, he added.

He said the chip shortage, combined with the impact of the omicron variant of the coronavirus, were a difficult 1-2 punch for the automaker in its fourth quarter.

"We just weren't able to reach the higher volumes that some were expecting," Lawler told FOX Business’ Maria Bartiromo."