Ford to Cut Production at 6 North American Plants Amid Worsening Semiconductor Shortage

Consideration of up to 3 Weeks of Operational Suspension from April to June
Expected Sales Revenue Decrease of 1 to 2.5 Billion USD This Year

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Amid the deepening semiconductor supply issues in the global automotive industry, American automaker Ford has announced plans to reduce vehicle production at six plants in the North American region due to semiconductor shortages. There are concerns that overall automotive industry sales could decrease by approximately $60 billion (about 68 trillion KRW) this year.

According to CNBC on the 31st (local time), Ford stated that due to the worsening semiconductor shortage, it will reduce vehicle production at six plants in North America. The affected plants are located in Illinois, Ohio, Kentucky, Michigan, Missouri, and Ontario, Canada. These plants are known to produce various models including the F-150 pickup, vans, Ford Explorer SUVs, and Ford Escape.

Ford plans to cut production at the six plants by suspending operations for up to three weeks or canceling overtime work from April through June. Previously, Ford had projected that this semiconductor shortage could reduce its profits by $1 billion to $2.5 billion this year. The company will report its first-quarter earnings on the 28th of next month and is expected to provide further updates on the impact of production cuts due to semiconductor shortages.

The semiconductor shortage problem in the global automotive industry is worsening. Last September, as the spread of COVID-19 slowed and automotive demand began to recover, orders for automotive semiconductors surged, exacerbating the semiconductor shortage. This was because semiconductor manufacturers had previously reduced production of automotive semiconductors in anticipation of decreased vehicle demand.

Recently, the situation has become even more difficult as the Suez Canal was blocked for over a week due to a container ship grounding accident, causing logistics delays even after traffic resumed. Consulting firm AlixPartners forecasts that the semiconductor shortage will cause global automotive industry sales to decline by more than $60 billion this year.

This content was produced with the assistance of AI translation services.