The Latest Chip Shortage Shutdown Will Cost Ford an Estimated $1.2 Billion in Revenue

[Wolf Man]

Ford Motor Company (NYSE:F) said on Wednesday that it will suspend production at several of its factories, including the Detroit-area plant that builds the profitable Ranger pickup and (soon) the Bronco SUV, as it works through a worsening global shortage of automotive-grade semiconductors.

In a memo to employees, Ford said that its Michigan Assembly Plant, which builds the Ranger and is preparing to begin production of the much-anticipated Bronco, will be shut down for the first time during the weeks of May 17 and May 24. Other Ford plants, including a Kansas City factory that builds F-150 pickups and Transit commercial vans, will also be shut down during that same period, Ford said.


The lost production will be expensive for Ford. Using first-quarter production figures, I estimate that the loss of two weeks' production of the Ranger, the Kansas City-built F-150, and the Transit will cost Ford a bit over $1.2 billion in revenue. Given the likelihood that the chip short will linger for at least several more months, Ford may not be able to make up that lost production before the end of the year.

Details of the memo to Ford employees were first reported by Automotive News.

Ford is one of a long list of global automakers that has been forced to cut back production amid the global chip shortage, a consequence of high demand for computers and other digital devices amid the COVID-19 pandemic last year.


Ford warned last week that it expects the chip shortage to hit its worst point in the current quarter, with some improvements in supply likely in the second half of 2021. The company currently expects the shortage to cost it about 1.1 million vehicles, or about 20% of its planned production, over the course of the full year.

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[UNIKRN150]

They're going to lose a hell of a lot more than that in future sales if they don't start treating CUSTOMERS waiting on orders and people getting rusted trucks a LOT better!

I don't expect them to magically pull computer chips out of their hats but they absolutely have the resources to reach out to people being delayed by the shortages and at least show a little appreciation for our waning patience.

And as far as the rusty, rotten trucks they shipped... they should be ashamed and embarrassed and falling all over themselves to make it right.

Instead all anyone is getting is... "TOO FKING BAD! GO BUY A WIRE BRUSH AND A CAN OF RUSTOLIUM"!

 

[bobstar]

They're going to lose a hell of a lot more than that in future sales if they don't start treating CUSTOMERS waiting on orders and people getting rusted trucks a LOT better!

I don't expect them to magically pull computer chips out of their hats but they absolutely have the resources to reach out to people being delayed by the shortages and at least show a little appreciation for our waning patience.

And as far as the rusty, rotten trucks they shipped... they should be ashamed and embarrassed and falling all over themselves to make it right.

Instead all anyone is getting is... "TOO FKING BAD! GO BUY A WIRE BRUSH AND A CAN OF RUSTOLIUM"!

Ya it sure pisses a guy off! To have to wait 7 months, and longer in many cases, who knows what they will try to push on a guy!

 

[Chasinsparks]

They won't lose anything, they will pass it on the consumer and regain what they lose and then some. It's only a slight setback for them.

 

[spectre446]

So Dearborn F150 side isn't shutting down anymore from here on out?

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