Ford, Nissan deepen NorthAm output cutbacks

Automakers Ford Motor and Nissan Motor are the latest to make additional North American production cuts due to the global semiconductor shortage, with Ford slowing deliveries of its top-selling F-150 full-size pickup truck.

The semiconductor shortage is forcing Ford to build its aluminum and steel-intensive F-150 and Edge SUVs without certain parts, including semiconductor-dependent electronic modules. The company will hold the partially built vehicles for what the company called "a number of weeks" before installing the modules and shipping the completed vehicles to dealerships.

The move by Ford is the latest by North American automakers, who have struggled to deal with shortages of semiconductors and other materials needed for them to build vehicles.

The semiconductor shortage and harsh winter weather in February led the US assembly of light trucks and automobiles down to a seasonally adjusted annual rate of 9mn units in February from 10.34mn units in January, according to data from the Federal Reserve. That compared with an average of 8.6mn units per month for all of 2020, when output was particularly hard hit by the Covid-19 shutdowns and recession in the spring.

The semiconductor shortage has also become a growing potential headwind for the US steel market, which has been buoyed over the last six months by strong auto demand that has kept supply tight and helped drive the Argus weekly domestic US HRC Midwest assessment up to record highs of $1,286.50/short ton (st) ex-works Midwest on 16 March.

It is the second time that F-150 production has been impacted by the semiconductor shortage. In February Ford reduced production of the F-150 at its Dearborn Truck Plant in Michigan by two-thirds for a week, while cutting production at its Kansas City Assembly Plant by one-third for a week.

The company also canceled the night shift on 18 March and both shifts today at its Louisville Assembly Plant in Kentucky due to a lack of semiconductors, reducing production of the Ford Escape compact SUV and Lincoln Corsair crossover. Production is expected to restart at reduced rates on 22 March, with full production resuming the following day.

Ford will also suspend production of its Fiesta sedan at its Cologne, Germany, plant on 22 March. That plant had previously stopped production from 1-16 March.

Nissan has halted production at its Aguascalientes plant in Mexico from 19-23 March impacting production of the Versa and March sedans and Kicks subcompact crossover.

In the US, the company is halting production at its Smyrna, Tennessee, plant of its Murano crossover on 19 and 22 March. Production at Smyrna of Nissan's Rogue, Maxima and Leaf vehicles that was scheduled for 20-21 March in order to make up for lost production from February's ice storm is also being cancelled.

In Canton, Mississippi, Nissan is canceling regular production of its Altima sedan on 19 and 22 March and overtime production on 20 March. Overtime production of Nissan's NV vans for 20 March is also being cancelled.

Toyota curtailed production at two of its plants in Mexico from 15-17 March due to semiconductor supply issues, weather impacts in the US and a shortage of petrochemicals. The company also announced this week that supply issues would impact production at its Kentucky and West Virginia plants.

Honda announced this week that it was suspending production at most of its US and Canadian plants for one week beginning on 22 March because of supply chain issues. The company also suspended production at its Celaya, Mexico, plant on 18 March. It did not provide a date for reopening the facility, which produces the HR-V subcompact SUV.

General Motors (GM) will shutter production at its Lansing Grand River assembly plant in Michigan, which builds the Chevrolet Camaro and Cadillac CT4 and CT5 sedans from 22 March through at least the end of the month.

In early March, the company extended plant shutdowns at several of its facilities into mid-April because of the lack of semiconductors.

In March 2020 North American automakers cut production at many of their plants due to Covid 19-related economic shutdowns. The reopening process, which began in May and June, exposed issues across the automotive supply chain as automakers raced to produce vehicles for the undersupplied market.

By Rye Druzin