U.S. Markets open in 6 hrs 39 mins

Ford halts production at two German factories as chip shortage worsens

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.
Cradles transport Ford Focus automobile bodies inside the Ford Motor Co. factory in Saarlouis, Germany, on Wednesday, Sept. 25, 2019
Cradles transport Ford Focus automobile bodies inside the Ford Motor Co. factory in Saarlouis, Germany, on Wednesday, Sept. 25, 2019

Ford has put the brakes on production in two of its German factories as the global microchip shortage continues to devastate the car industry.

The carmaker is halting production in its Cologne and Saarlouis factories for several weeks due to the semiconductor drought, having already cut its second quarter production in half.

A Ford spokesman said: “The situation on the global semiconductor market remains tense and, according to all estimates, will continue to be so in the coming months, resulting in supply bottlenecks.”

The carmaker said it will make up for lost time “as best we can”, which would mean prioritising cards that have already been ordered by customers.

It will halt production at its Cologne plant twice, from May 3 to June 18 and from June 30 to July 9. Around a third of workers will have their hours reduced during that time, it said.

It added that it expects to re-open to full production from August 16, with output at its Saarlouis plant halting for the rest of May and most of June.

Both plants make about 1,000 cars per day in normal circumstances, with Saarlouis making the Ford Focus model and Cologne making Ford Fiestas and engines.

At least 169 industries from soap-making through education to air conditioning have been affected by the shortage, according to a recent report from Goldman Sachs. AlixPartners, a consulting firm, estimates that automakers alone will lose $61bn in sales.

The consumer electronics boom sparked by Covid lockdowns has combined with trade wars between the US and China, power outages in Texas and a brief but dramatic blockage of the Suez Canal to strain production across the world.

Last week Samsung warned that smartphones, televisions and home appliances would also begin to be affected as it announced plans to “rebalance” production to lessen the dearth.

Daimler, Fiat Chrysler, General Motors, Honda, Jaguar Land Rover, Mitsubishi, Nissan, Renault, Toyota, Volkswagen and Volvo have all been forced to stop plants or pause manufacturing since the start of the year.

A trade group representing the US auto industry warned last month that problems could continue until the end of October, leading to 10pc fewer cars being built in the country.