Ford Plant Shutting Down Due To Computer Chip Shortage

Yet another hurdle for the automotive industry. After months of set backs and shutdowns for automakers across the globe due to COVID-19, another issue has now shutdown the Ford plant in Louisville, Kentucky.

Luckily, the computer chip shortage causing the shutdown is reported to only last a week, however it is an industry-wide problem and is expected to spread to many other auto plants. CNN reports that all 3,800 hourly workers will receive about 75% of their normal pay during the one-week shutdown.

In a statement Ford commented, “The global semiconductor shortage is presenting challenges and production disruptions — for the global auto industry, including Ford, which could have a significant knock-on effect on jobs and the economy given the importance of auto manufacturing.”

When the pandemic started last year and sales were severely reduced, automakers were able to cut back on orders for computer chips. However, with production and sales back on the rise, chip availability is becoming an issue. To contribute to the shortage, there is also an increased demand for laptops due to an expanded work-from-home community which need the chips as well.

The average car has between 50 to 150 chips in it and unfortunately in this day and age all the chips are needed to move forward with assembly of the cars.

The shortage isn’t specific to the U.S., plants in Europe and Asia are also dealing with shortages. Kristin Dziczek, vice president of research at the Center for Automotive Research, says this is a temporary issue:

“It’s temporary but it’s not going to be short-term. The problems are likely to last throughout the first three months or so of the year. Supplies should hopefully be back to normal in the second quarter.”

The Ford Escape and the Lincoln Corsair are produced at the Louisville plant.

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