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North American auto industry feels effects of global microchip shortage

Jordyn Grzelewski, The Detroit News on

Published in Automotive News

Automakers in North America are beginning to feel the effects of a global shortage of semiconductors that has caused a crunch for manufacturers worldwide, adding a wrinkle to the industry's attempted comeback from the coronavirus crisis.

Ford Motor Co. confirmed Friday that it will idle its Louisville Assembly Plant in Kentucky this week "due to a supplier part shortage connected to the semiconductor shortage," company spokeswoman Kelli Felker said.

Ford builds its Escape and the Lincoln Corsair SUVs in Louisville. The automaker said it has moved up a previously planned week of downtime to next week due to the parts shortage. The production stoppage will affect 3,900 workers who will make approximately 75% of their gross pay during that time.

"We are working closely with suppliers to address potential production constraints tied to the global semiconductor shortage," Felker said in a statement.

Meanwhile, Fiat Chrysler Automobiles NV said Friday that it would delay the restart of its Toluca, Mexico, plant, which builds the Jeep Compass, and would schedule down time at its plant in Brampton, Ontario, which builds the Chrysler 300, Dodge Charger and Dodge Challenger.

"This will minimize the impact of the current semiconductor shortage while ensuring we maintain production at our other North American plants," company spokeswoman Kaileen Connelly said in a statement.

 

A spokesperson for Toyota Motor Corp.'s North America division told The Detroit News that the automaker has scaled back production of its Texas-built Tundra pickup truck by 40% this month in response to the shortage. Toyota is still evaluating how the shortage might affect other products as the manufacturer attempts to put in place "counter-measures" to minimize the impact.

General Motors Co. has not announced any impact on its production schedules, but spokesman David Barnas said in a statement that the Detroit automaker is "aware of the increased demand for semiconductor microchips as the auto industry continues its global recovery."

"Our supply chain organization is working closely with our supply base to find solutions for our suppliers' semiconductor requirements and to mitigate impacts on GM production," he said.

The shortage is sending a ripple of disruptions across the automotive industry, according to automakers and media reports from around the world. There are a number of factors that explain the parts issue, but a major one has to do with the pandemic.

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