Stellantis is temporarily shutting down its Windsor Assembly Plant due to a global shortage of semiconductors for the next three weeks as the shortage of semiconductors continued to force carmaker to reduce their production plan despite healthy demand.
“We are working closely with our global supply chain network to manage the manufacturing impact caused by the global microchip shortage and will continue to make production adjustments as necessary,” according to a statement from Stellantis, which temporarily shut an assembly plant in Brampton, Ontario due to the semiconductor shortage.
The company’s already been forced to halt production at its Brampton, Ontario facility due to the lack of chips. Overall, the problem has been plaguing the industry for some time now with nearly all automakers in North America either having to shut down or slow production lines due to the issue.
Unifor weighs in on shortage
“Usually, manufacturing is the big dog, but with the same chips being used by Apple and other software companies in computers, iPads and phones, the reality is it changes the game,” noted post on the Facebook page of Unifor Local 444.
“It just goes to show you how brittle our parts supply chain is and how volatile,” the post added, highlighting the fact the semiconductor chips used across the auto industry are made in East Asia.
“These kinds of things should open our governments’ eyes to look at a ‘Build Canadian’ mandate on a lot of things. Instead of spending a dime, we’re going (overseas) to Taiwan or China to spend a nickel,” the post added.
Ford faces cut in 2021 profits
Meanwhile, Ford Motor Co., which is cutting production shifts at critical truck plants in Dearborn, Michigan, and Kansas City, Missouri, estimated the company’s production of new vehicles it has planned for the first quarter and second quarter could drop between 10% to 20% due to the shortage of semiconductors.
John Lawler, Ford’s chief financial officer, noted the production shortfall could reduce the company’s earnings between $1 billion and $2.5 billion. Ford’s current guidance for investors is for earnings between $8 billion and $9 billion in 2021 after losing $1.3 billion in 2020, including $2.8 billion in the fourth quarter.
“The situation is very fluid,” said Lawler during a conference call with analysts. He added the company has been working with the supply base for the past couple of weeks to figure out a path forward. The company expects to have more and better information by the end of the first quarter.
The temporary reductions at the Kansas City and Dearborn plants, where the company builds the popular F-150 pickup truck, come as the inventory of the vehicles on dealer lots, at 53 days, is lower than it has been in years, according to Ford executives.
General Motors Co. also has been forced to shut down and scale back production in the face of the shortages, which have impacted manufacturers around the world.
Senators ask Biden for help
Michigan’s U.S. Senators Gary Peters and Debbie Stabenow are urging the Biden administration to work with Congress in addressing the global semiconductor shortage facing auto manufacturing. In addition a letter, the Senators have been urging a number of Biden administration officials directly to take action.
In their letter, the Senators highlighted how the shortage threatens to disrupt the post-pandemic economic recovery and may impact production in communities across the country – including Michigan.
“We write to express our concerns about the impact that the global shortage of automotive-grade semiconductor chips will have on auto manufacturing in the United States. This shortage threatens our post-pandemic economic recovery, the consequences of which stand to be especially acute in dominant auto manufacturing states like ours,” the senators wrote.
“We believe that the incoming administration can continue to play a helpful role in alleviating the worst impacts of the shortage on American workers, and we urge you to work with us to address the global semiconductor shortage.”