Ford will be idling Mustang production this week due to an insufficient supply of semiconductor chips. For all the talk the industry made about getting over supply chain hurdles in 2021, manufacturers continue citing insufficient access to microchips as the primary obstacle preventing them from enjoying more routine operations.
The automaker confirmed the move on Tuesday, explaining that Michigan’s Flat Rock Assembly will be down until sometime next week.
While the facility has a storied history with Ford’s relationship with Mazda, the site is now responsible for manufacturing the (real) Mustang. The Detroit News reported on the supply problem last night, explaining that these production issues are hardly unique to Blue Oval:
The production cut is just the latest signal that the shortage of the crucial component that powers many of the automated and electronic features in vehicles will continue to be a challenge more than a year after it started.
Toyota Motor Corp. said Tuesday that it is unlikely to reach its target of manufacturing 9 million vehicles this fiscal year through March because of the shortage, Bloomberg reported. The Japanese automaker plans to scale back production by about 150,000 units to 700,000 units in February, according to the outlet.
The semiconductor crisis emerged shortly after the pandemic in 2020 and was exacerbated by people staying home and purchasing small electronic devices using more-lucrative semiconductor chips. This resulted in an industry-wide shift away from vintage automotive chips offering narrower profit margins. Meanwhile, supply chains were in shambles following aggressive COVID restrictions — making it difficult for the Asian-based components to get into Western markets in a timely fashion.
This forced automakers to cut production and helped to create the empty lots that have encouraged dealerships to charged exorbitant fees for first and secondhand vehicles. Despite dealers making a relative killing from elevated demand, it’s estimated the situation has cost the global industry hundreds of billions of dollars in potential revenue. Analysts have stated that they’re expected the chip shortage to resolve itself by the end of 2022. But the same was said of 2021.
[Image: Ford Motor Co.]
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