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Ford keeps the brakes on as semiconductor shortage continues

Ford Motor Co. has extended production halts at four U.S. plants and one in Canada for an additional two weeks, The Wall Street Journal reported, due to ongoing semiconductor shortages. The outages will reportedly impact the production of the F-150 truck that the company had previously kept going with reduced content.

Global semiconductor supplies continue to grow rapidly, as discussed in Panjiva's research of April 21, but a reduction in orders during 2020 has led manufacturers to prioritize other customers. A call to arms by the Biden administration is unlikely to yield an increase in availability within the time frame of a few months.

The closures will have a knock-on effect on the rest of Ford's supply chain. Panjiva's data shows the company had ramped up imports in March, with growth of U.S. seaborne imports linked to the company increasing 67.8% year over year and by 39.2% compared to March 2019.

That brought the first-quarter 2021 total to a 24.1% increase, raising the risk of oversupply of non-semiconductor parts. The ramp-up in the first quarter has been led by shipments from Europe, which climbed 116.0%, while shipments from China rose by just 17.1% and those from Mexico declined.

Ford's Mexican parts operations have slowed significantly, however, possibly reflecting a wider rearrangement of the supply chain. Shipments in total fell 53.5% year over year in February after dropping 80.7% in January. The decline has included reduced shipments of gearboxes and engines, which declined by 81.1% and 54.3%, respectively, in February while shipments of body components dipped 29.7%.

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Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.