A Ford Escape Sports Utility Vehicle (SUV) undergoes the final inspection during production at the Ford Motor Co. assembly plant in Louisville, Kentucky, USA, on April 28, 2015.
Luke Sharrett | Bloomberg | Getty Images
Ford Motor and Nissan Motor confirmed on Friday that they are reducing vehicle production at plants in the US and Japan due to a shortage of semiconductors, pointing to a growing concern for the global auto industry in 2021.
Ford will shut down an SUV factory in Kentucky next week, while Nissan is cutting production at a factory in Japan. Both companies said they are working closely with suppliers to resolve the situation and monitor for any additional consequences.
Automakers and parts suppliers began warning of a semiconductor shortage late last year after vehicle demand rose faster than expected following a two-month shutdown of production facilities due to the coronavirus pandemic.
Semiconductors are extremely important components of new vehicles for everything from infotainment systems to other more traditional components such as power steering. They are also easily used in consumer electronics.
German automaker Volkswagen said last month it has adjusted production at factories in China, North America and Europe due to a shortage of semiconductors, Reuters said. America’s largest automaker, General Motors, has not had to cut production, but the company is closely monitoring the situation, spokesman David Barnas said.
“We are aware of the increased demand for semiconductor microchips as the automotive industry continues its global recovery,” he said in an emailed statement. “Our supply chain organization works closely with our supply base to find solutions for our suppliers’ semiconductor requirements and reduce the impact on GM manufacturing.”
Ford’s affected factory, the Louisville Assembly Plant, builds the Ford Escape and Lincoln Corsair SUVs and employs approximately 3,900 employees per hour. According to Ford spokeswoman Kelli Felker, it will move a previously planned stop from a week later this year to next week due to the shortage.
“We are working closely with suppliers to address potential manufacturing constraints related to the global semiconductor shortage,” she said in an emailed statement.
The affected Nissan plant, the Oppama plant in Japan, is building the Note, a subcompact car not sold in the US. Lloryn Love-Carter, a Nissan spokeswoman in the US, said the company’s domestic production has not been affected by the semiconductor shortage.
“We are working closely with our supplier partners to monitor the situation and assess any impact on our operations in North America,” she said in an emailed statement.