Ford Extends Downtime at U.S., Canada Plants on Chip Shortage

The Dearborn, Mich.-based automaker will take outages the weeks of May 3 and May 10 at its Chicago and Flat Rock, Mich., assembly plants as well as at a plant near Kansas City, Mo., the spokeswoman said.

The company’s facility in Avon Lake, Ohio, will produce only medium-duty pickup trucks and certain cab chassis during those two weeks.

In Canada, meanwhile, Ford will take downtime at its Oakville, Ontario, assembly plant the week of May 3, she said.

Ford had previously announced that those plants would be down through mid- to late April.

North America is not alone in seeing such production disruptions. Ford is also scheduling outages at assembly plants in Europe and in Turkey. Ford Otusan, a joint venture in Turkey, for example, will temporarily stop production at its plant in Gölcük, in Turkey’s Kocaeli province, through June 13.

“Our teams continue prioritizing key vehicle lines for production, making the most of our available semiconductor allocation,” the spokeswoman said.

The Chicago plant makes the Ford Explorer SUV and Lincoln Aviator SUVs. The Flat Rock facility makes the Ford Mustang sports car and the Lincoln Continental sedan. And Kansas City produces the F-150, the best-selling pickup truck in the U.S., as well as the Transit utility van. according to Ford’s website.

Oakville makes the Edge and Nautilus SUVs. Gölcük also makes the Transit van.

Ford joins a raft of North American automakers that have extended downtime into the spring months on the heels of chip and other parts shortages – rubber and resin are also in short supply – that emerged late last year.

Those shortages were made worse by severe winter weather earlier in February as well as by severe port congestion in the U.S. and abroad.

The issue is relevant for steel because auto assembly plant outages result in at least marginally less demand for finished steel products and reduced supplies of prime scrap, a key feedstock for electric-arc furnace (EAF) steelmakers in particular.

The parts shortages have to date not impacted steel prices, which remain at record highs.

Case in point: Steel Market Update’s average galvanized base price stands at $1,580 per ton ($79/cwt), up 5.3% from $1,500 per ton a month ago and up 45.6% from $1,085 per ton at the beginning of the year.

Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves noted that any tons not sold to automotive customers can be diverted to the higher priced and more profitable spot market.

Cliffs is a key supplier to the North American automotive industry following its acquisitions of AK Steel and ArcelorMittal USA.

By Michael Cowden, Michael@SteelMarketUpdate.com