Cars have been increasingly difficult to come by due to two main issues: the global chip shortage and the coronavirus (COVID-19) pandemic. The pandemic and the chip shortage have been significant factors in automakers delaying production or temporarily shutting down their factories. It appears that Ford is the latest OEM to suffer a shutdown.
Is the chip shortage the reason that Ford shutting down a Mexico plant for two days?
Reuters has reported that Ford will halt production between October 11th and 12th, 2021, at its plant in Hermosillo, Mexico. During the shutdown, employees will receive 75% of their regular salaries on the days that the facility is shut down.
This specific plant is where Ford builds the new Ford Bronco Sport SUV. Ford stated that the shutdown is due to a “shortage of material.” Ford did not specify the specific material. Ford did not respond to a request by Reuters for comment.
It would be easy to assume that the chip shortage is the reason for this shutdown. It would not be the first time Ford had to delay production on a vehicle due to the global semiconductor shortage. However, since the automaker declined to mention what materials the plant is short on, specific causes would only be speculation based on the current industry climate.
The Reuters report does seem to suggest that the global chip shortage may be the cause of the two-day shutdown.
Will other Ford vehicles be affected by the shutdown?
The Ford Bronco Sport SUV is the somewhat less capable version of the current Bronco. While the Bronco Sport shares the name and badge of the more off-road friendly versions, the Bronco Sport is built on a different chassis altogether.
The Ford Bronco Sport shares its chassis with the Ford Escape SUV and the Ford Maverick truck. The Maverick truck is also assembled at the Hermosillo plant, which means both vehicles will likely see delays in deliveries due to this temporary shut down.
It is difficult to estimate the financial impact this two-day halt in production will have on Ford overall, but we speculate that it will be minimal. The interruption in production could cause the Ford Bronco Sport and Maverick truck to see temporary price increases at dealerships due to the momentary supply shortage. Again, Ford has not confirmed that the temporary plant closure is due to the global chip shortage.
Ford is increasing production for other vehicles.
This two-day factory shutdown could indeed result in lower production for the Ford Bronco Sport and the Maverick truck. Though, Ford is looking to boost production for its other vehicles. The Ford F-150 Lightning electric truck received over 150,000 pre-orders. Due to higher than expected demand, Ford announced that it would double its annual production target of the F-150 Lightning from 40,000 units per year to 80,000. To reach that target, Ford is investing heavily in new facilities specifically for assembling the F-150 Lightning and its batteries.
Currently, it is unclear if the Hermosillo factory shut down will have a significant impact on production goals that Ford may have set for the Bronco Sport.