Ford cuts output of F-150 pickups due to semiconductor shortage

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Ford Motor Co. displays a 2021 Ford F-150 pickup truck at the Rouge Complex in Dearborn, Michigan

By David Shepardson and Ben Klayman

WASHINGTON (Reuters) – Ford Motor Co said on Thursday it is cutting shifts at two plants that build its highly profitable flagship F-150 pickup trucks starting next week due to a global shortage of semiconductor chips and warned the issue could result in the loss of 10% to 20% of planned first-quarter production.

The No. 2 U.S. automaker said it will run one of three shifts of production at its Dearborn Truck Plant the week of Feb. 8, while the truck portion of its Kansas City Assembly Plant will run two of three shifts of production during that week. Both are expected to return to three shifts the following week.

Ford Chief Financial Officer John Lawler said the production losses stemming from the semiconductor shortage could lower Ford’s adjusted earnings by $1 billion to $2.5 billion.

Lawler said moving forward Ford will continue to prioritize and allocate chips to the highest-margin vehicles when it can. “It’s going to be a logistic effort to do that,” he said.

Ford declined to say what part or supplier were involved or how much volume would be lost.

Global automakers have been caught off guard by the shortage of crucial semiconductors, used for everything from computer management of engines to driver-assistance features such as emergency braking.

Other automakers hit by the shortage include General Motors Co, Volkswagen AG, Toyota Motor Corp, Nissan Motor Co and Subaru Corp.

Up to now, automakers have largely focused on cutting production of less profitable vehicles as they manage through the shortage, but Ford cutting output of its high-profit trucks will raise concerns the impact is spreading.

Ford spokeswoman Kelli Felker declined to address why the F-150 had been affected, but the Dearborn, Michigan-based company may discuss the matter further later on Thursday.

Felker said the automaker was “working closely with suppliers to address potential production constraints tied to the global semiconductor shortage and working to prioritize key vehicle lines for production.” Ford has previously cut other production because of the issue.

Also on Thursday, union sources told Reuters that automaker Stellantis will slow production at its Melfi plant in Italy next week due to a shortage of microchips and other parts and will put over 7,000 workers on furlough. Mazda Motor Corp said it expected a production cut of 7,000 vehicles this month as a result.

On Wednesday, GM said it would cut production at four of its plants due to the chip shortage.

On Tuesday, a group of 15 U.S. senators including Majority Leader Chuck Schumer and Republican John Cornyn urged the White House to work with Congress to address the global semiconductor shortage hitting auto manufacturing.

(Reporting by David Shepardson in Washington and Ben Klayman in Detroit; Editing by Chizu Nomiyama and Matthew Lewis)

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