The Chip Shortage Is Chaos

The Chip Shortage Is Chaos

Ford is halting production of F-150s at its factory in Dearborn, Michigan, from Friday until Sunday, before restarting again on Monday, while Chrysler is shutting down minivan production for four whole weeks at its factory in Windsor, Canada, both ostensibly because of the global chip shortage. Expect more chaos.

As Raph noted this morning, the F-150 is Ford’s biggest cash cow. Without the F-150, Ford is just a mediocre SUV company that also sells Mustangs. The Pacifica is of a far lesser importance to Stellantis, as Ford sold 787,422 F-Series trucks last year, while Chrysler sold 93,802 Pacificas.

But what that really shows is this chip shortage is seemingly equal opportunity, probably much to the chagrin of automakers who might have thought at some point that the worst of the pandemic was behind them.

Automotive News reported more on Friday on the mess in Canada, where a union said the four-week minivan production stoppage would start March 29:

General Motors Canada confirmed on Wednesday its CAMI plant in Ingersoll, Ont., will remain idled until at least mid-April. The Chevrolet Equinox is assembled there.

Ford’s Oakville, Ont., plant is partially assembling Ford Edge vehicles and storing them on lots until the required microchips arrive to finish them.

The Windsor Star reported Friday that Ford’s Essex Engine Plant in Windsor, Ont., will be down April 16.

[…]

The plant makes engines for the F-Series pickup, Mustang and E-Series commercial vans, and Ford on Friday idled production of the F-150 for three days at a plant in Michigan.

Meanwhile, Honda Canada would only say that its Alliston, Ont., factory, which builds the Civic, has been affected.

I had sort of assumed, when this all began, that automakers would keep the flow coming to its most profitable products and cut off semiconductor supply to other products that are less profitable, but if the chip shortage is affecting the production of cars like the Chevy Equinox and Ford Edge, on top of the F-150, that’s cutting into the bone.

Still, according to a report from Cox Automotive on Wednesday, the production stoppages may not have much effect in the short-term for consumers, as inventories for a lot of cars and some trucks remained healthy enough. The F-150, for example, has a 65 days supply of inventory, or only a little less than the industry average of 71, while the Ram 1500 Classic, also affected by the chip shortage, has 136 days’ supply. In a month or two we’ll survey the real damage.