The computer chip shortage starts to hit automakers as they struggle to keep production and shipments of highly profitable pickup trucks going.
After the chip shortage began, automaker companies committed to using the chips they have on hand in order to keep building their most widespread vehicles. Yet now, Ford and Stellantis are having a problem delivering completed pickups to their dealers.
Ford reported it has started building the nation’s best-selling vehicle, named the F-150 pickup, without some of the chips it requires. The company will park those unfinished trucks while they are waiting for the arrival of the missing chips. Ford is not going to ship them to dealerships.
Furthermore, Ford has also temporarily shut down one of three shifts at the Kentucky Truck plant that produces its larger F-Series pickups and full-size SUVs. Ford is also temporarily closing a plant in Ohio that builds vans and other trucks. According to the company, both plants are anticipated to return to normal production in a week.
The chip shortage will reduce investors earnings in 2021 by more than a billion dollars
It’s important to note that the chip shortage has been hurting automakers around the globe. Automaker companies cut back computer chip orders in early 2020 when the COVID-19 pandemic caused temporary plant closures. Furthermore, the pandemic slammed the brakes on auto sales and production. Electronics manufacturers have experienced strong sales throughout the coronavirus pandemic and happily snapped up the excess supply.
However, when car sales bounced back sooner than anticipated, it left the industry struggling with a chip shortage.
Significantly, the average car has nearly 50 – 150 chips in it. Some chips can be used in many different models. This has enabled the automakers to keep up production of trucks and SUVs until now. Still, there are other chips that are individual to each kind of vehicle.
Furthermore, General Motors and Ford have both cautioned investors that the chip shortage will reduce their earnings in 2021 by more than a billion dollars.