Ford plans to suspend or cut production at 8 of its factories due to chip supply constraints starting today

Ford Motor plans to suspend or cut production at eight of its factories in the United States, Mexico and Canada throughout this week because of chip supply constraints, a spokeswoman told Reuters last Friday. Last week, Ford has mentioned that Q1 Volume may decline due to the Chip Shortage issue.

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Production at factories in Michigan, Chicago and in Cuautitlan, Mexico will be suspended. In Kansas City, production of its F-150 pickup trucks will be idled while one shift will run for production of its Transit vans. The Detroit automaker will also run a single shift or a reduced schedule at its factories in Dearborn, Kentucky and Louisville, while removing overtime at its Oakville factory in Canada — Reuters reported.

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The global semiconductor shortage continues to affect Ford’s North American plants – along with automakers and other industries around the world. Behind the scenes, we have teams working on how to maximize production, with a continued commitment to building every high-demand vehicle for our customers with the quality they expect.

Ford emailed statement to CNBC

Last week, Ford said that it is planning a major reorganization to prepare for the electric future, using Tesla Inc.’s success as a road map and accelerating EV spending by as much $20 billion, according to Bloomberg.

The effort, led by a former Apple Inc. and Tesla executive, calls for Ford to spend an additional $10 billion to $20 billion over the next five to 10 years converting factories worldwide to electric-vehicle production from making gasoline-powered cars, according to people familiar with the plan. 

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“We are executing our Ford Plus plan to transform the company and thrive in this new era of electric and connected vehicles. We would not comment on speculation,” Mark Truby, the company’s chief communications officer, said in an emailed statement. 

Doug Field, the former head of Apple’s car project, is leading Ford’s overhaul, the people said. Field was also a top executive at Tesla, where he engineered the Model 3.

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Ford’s first two entries into the EV market are an electric version of the best-selling Ford F-150 pickup (the Ford F-150 Lightning) and the Mustang-inspired SUV (the Ford Mustang Mach-E).

Last week, when asked about Ford’s rivals in the EV Market, CEO Jim Farley mentioned the Chinese EV maker Nio and the sector leader, Tesla. In an interview on Yahoo Finance Live. “Well, the companies that I think about that I admire because of their commitment — and frankly, the hard work they did to earn their reputation — are companies like Nio and Tesla”.

“They’ve been at this a long time. They engineer their vehicles differently. I’m most respectful of Tesla’s profitability. They’re now making more than $10,000 a vehicle in their second quarter earnings.”

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“We have over 10,000 orders already from a lot of different customers [for the E-Transit]. I think we just got over 1,000 orders from Walmart. So, the demand is very high,” Farley told Yahoo Finance Live. “We have about 200,000 reservations [for the Lightning]. Now we’re converting those into orders where people have to physically order the vehicle, almost very few of them are falling out.”

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