autoevolution
 

Chip Shortage Pressures Ford to Build F-150 Trucks Without Certain Modules

A major automaker such as the Ford Motor Company lives and dies by quarterly figures. In the middle of a semiconductor crisis, the Blue Oval decided to keep making F-150s and Edges “without certain parts, including electric modules that contain scarce semiconductors.”
2021 Ford F-150 31 photos
Photo: Ford
2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-150 PowerBoost V6 hybrid2021 Ford F-1502021 Ford F-1502021 Ford F-150 interior2021 Ford F-150 interior2021 Ford F-150 interior2021 Ford F-150 interior2021 Ford F-150 interior2021 Ford F-150 interior2021 Ford F-150 interior2021 Ford F-150 interior2021 Ford F-150 Max Recline Seats2021 Ford F-150 design sketch2021 Ford F-150 design sketch2021 Ford F-150 design sketch
The Dearborn-based automaker will build and hold trucks and crossovers for a number of weeks, then ship these vehicles to U.S. dealers once the modules become available. Of course, every F-150 and Edge will go through rigorous quality checks before delivery. As if that wasn’t bad enough for higher-ups and investors, Ford had to stop production at two assembly plants.

Workers at the Louisville Assembly Plant won’t work both shifts on Friday, but the Escape and Lincoln Corsair are expected to resume production on Monday on short shifts. Full output may resume Tuesday if Ford is capable of sourcing enough semiconductors. Also worthy of note, the Fiesta-making Cologne plant in Germany will grind to a halt for one day on March 22nd.

Regardless of the efforts made by Ford, the costs tied to these actions are huge. More to the point, the semiconductor shortage could impact the adjusted EBIT by between $1.0 to $2.5 billion if the scenario extends through the first half of 2021. EBIT can be calculated as revenue minus expenses excluding taxes and interest, and adjusted refers to non-recurring items that aren’t expected to show up in financial statements over time.

To better understand what $1.0 to $2.5 billion means in terms of adjusted EBIT, you only need to look through the automaker’s financial data for the fourth quarter of 2020. In the final three months of the previous year, Ford reported $1.7 billion in adjusted earnings before interest and taxes.

Reading between the lines, the Blue Oval is looking forward to pretty grim first and second quarters. With a bit of luck, chipmakers will get their act together by mid-2021 and the auto industry will be back at full steam.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram X (Twitter)
press release
About the author: Mircea Panait
Mircea Panait profile photo

After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
Full profile

 

Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories