In addition to untold misery, the health crisis had a profound effect on semiconductors. Consumer spending tanked in the spring of 2020, which is why the foundries that make semiconductors throttled back production without knowing how many chips would be needed by the end of the year.
Increasingly more people set up home offices or sought out electronic distractions such as the PlayStation 5, Xbox Series X, and Xbox Series S consoles, translating to a dangerously low supply of microchips. The auto industry, however, is probably the biggest loser of the shortage.
The Blue Oval, for example, is forced to cut production at eight factories in North America. According to a letter obtained by the Detroit Free Press, the Ford F-150 line of the Kansas City Assembly Plant will be down for two weeks while the Ford Transit line will be offline on the week of July 19th.
Vice president of manufacturing and labor affairs John Savona said that the Dearborn Truck Plant is affected as well, along with the Chicago Assembly Plant, Flat Rock Assembly, the Kentucky Truck Plant where the Super Duty family of trucks is produced, Louisville Assembly, and Oakville Assembly.
Not even the Bronco Sport off-road crossover utility vehicle and the all-new Maverick unibody pickup can escape the chip shortage. Hermosillo Assembly will run one of two shifts in the weeks of July 12th and July 19th, which means that Ford’s third-quarter deliveries will take a serious beating.
More disruptions are inevitable, said Savona, highlighting that the Michigan Assembly Plant where the Bronco utility vehicle and Ranger pickup truck are made will be down for two weeks due to an unrelated parts shortage.
According to industry experts, the global automotive industry could lose $110 billion and 3.9 million passenger cars and light trucks because of the chip shortage. Jim Farley, the head honcho of the Ford Motor Company, expects chip-related losses of $1.0 to $2.5 billion in terms of adjusted EBIT.