Economy

Semiconductor shortages are reducing production for Ford and Nissan

Semiconductor shortages are reducing production for Ford and Nissan

The Ford Escape SUV undergoes final inspection during production at Ford Motor Company’s assembly plant in Louisville, Kentucky, United States, on Tuesday, April 28, 2015.

Luke Sharett | Bloomberg | Getty Images

Ford Motor Co. and Nissan Motor confirmed on Friday that they will cut car production at factories in the United States and Japan due to a semiconductor shortage, highlighting the growing concern for the global auto industry in 2021.

Ford will stop its four-wheel drive plant in Kentucky next week, while Nissan will cut production at a plant in Japan. The two companies said they are working closely with suppliers to resolve and monitor the situation for any additional impacts.

Auto makers and parts suppliers began warning of a shortage of semiconductors late last year after the demand for vehicles was Increase faster than expected After a two-month closure of factories due Coronavirus pandemic.

Semiconductors are very important components of new vehicles for everything from infotainment systems to other traditional parts like power steering. It is also easily used in consumer electronics.

German carmaker Volkswagen said last month it had adjusted production at facilities in China, North America and Europe due to a shortage of semiconductors, according to Reuters. General Motors, America’s largest automaker, hasn’t had to cut production, but the company is monitoring the situation closely, according to spokesperson David Parnas.

“We are aware of the increasing demand for semiconductor chips 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 to our suppliers’ semiconductor requirements and to mitigate impacts on GM production.”

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An affected Ford plant, Louisville Assembly Plant, builds Ford Escape and Lincoln Corsair SUVs, and employs about 3,900 workers every hour. Ford spokeswoman Kelly Felker said the previously planned one-week shutdown would be lifted later in the year to next week due to shortages.

“We are working closely with suppliers to address potential production constraints associated with the global semiconductor shortage,” she said in an emailed statement.

Affected Nissan plant, Obama’s plant in Japan, builds the Note, a small car not sold in the United States, US spokeswoman Lorne Love Carter 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 potential impact on our North American operations,” she said in an emailed statement.

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