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Ford cuts F-150 pickup truck production due to semiconductor chip shortage

36 points by totalZero 6y ago

remarkEon 6y ago
>The automaker said Thursday that its Dearborn Truck Plant in Michigan will drop to one shift from three for a week beginning Monday, while truck production at its Kansas City Assembly Plant in Missouri will drop to two shifts from three. Ford spokeswoman Kelli Felker said both plants are expected to return to three shifts the week of Feb. 15. So they're cutting production by a few shifts for a week? That hardly seems like a significant change.
- totalZero 6y ago
  Cutting production to 33% on one line and 66% on another for their crown jewel F-150. The company reports earnings today after the market closes, so I read the "for a week" part as calm optimism. Same goes for the "this could be over after the first half of 2021" comments (paraphrasing) from Ford and others affected by chip shortages. If demand stays high, then the only way out of this shortage is to build more fabs, and that takes time. Bosch has been building a fab for the past 3 years and AKM had to outsource to Renesas because its production was affected by a factory fire.
  - toomuchtodo 6y ago
    Are there any resources you could recommend on the root cause(s) of these semiconductor shortages?
    - PhantomGremlin 6y ago
      One other root cause, which I haven't seen mentioned yet, is that the purchasing clowns at the automakers cancelled chip orders last year after the pandemic hit. Oops. The automakers love to fuck over their suppliers like this. But, sucks for them, those same chip makers have other customers who continued to order chips. Which, in production volume, can have leadtimes of 26 weeks or more.
    - Jkvngt 6y ago
      Trump's ban on the export to China of certain materials and substances necessary for the manufacture of semiconductors is still in effect. Maybe China is prioritizing their use for military projects? Perhaps they have also sourced them from other foundries which had them on hand, using their substantial influence?
    - totalZero 6y ago
      AKM had a factory fire: https://www.prosoundnetwork.com/business/akm-factory-fire-shakes-up-pro-audio-industry https://www.prosoundnetwork.com/business/akm-factory-fire-sh... Hybrid and EV production is more semiconductor-laden than traditional ICE production: https://ihsmarkit.com/research-analysis/global-automotive-semiconductor-revenue-in-2020.html https://ihsmarkit.com/research-analysis/global-automotive-se... Total vehicle sales have entirely recovered after initially collapsing during the March 2020 lockdowns: https://fred.stlouisfed.org/series/TOTALNSA https://fred.stlouisfed.org/series/TOTALNSA Supply reliance upon TSMC and Samsung (customers include QCOM, NVDA, AMD, AAPL, MSFT) is a bottleneck that means CPUs, GPUs, SoCs, etc take longer to go from "oh there's more demand than expected" to "hey, that additional quantity just shipped": https://www.extremetech.com/computing/319580-amd-warns-xbox-ps5-pc-component-shortages-could-persist-into-summer-2021 https://www.extremetech.com/computing/319580-amd-warns-xbox-... Similarly, that bottleneck means that increased demand from one segment affects supply availability for all the others: https://www.scmp.com/tech/tech-trends/article/3120449/semiconductor-shortages-are-spreading-warns-smartphone-chip-giant https://www.scmp.com/tech/tech-trends/article/3120449/semico... Trump body-slammed China's chip industry: https://www.reuters.com/article/us-autos-tech-chips-focus/trumps-china-tech-war-backfires-on-automakers-as-chips-run-short-idUSKBN29K0GA https://www.reuters.com/article/us-autos-tech-chips-focus/tr...
      - InitialLastName 6y ago
        While the AKM fire made life hell for some in the fall, I don't think it had a lot to do with the overall semis shortage (the current market for audio codecs is insane, but differently so than the rest of the semi market). The bigger issue has been the rolling effects of the pandemic supply chain interruption. All these factories are operating on a just-in-time system. They carry 0 inventory (often getting multiple shipments per supplier per day straight onto the factory floor). Semiconductors happen to have a deeper depth of those steps (Mine silicon->build/process dies->doping->wirebonding and packaging->PCB assembly->final assembly) than most of the other bits, and every single step in that process has been running with effectively zero slack. Once there's a single interruption anywhere in the line, it echoes forever (see [1] Just in time works great when your suppliers don't have correlated failures. It goes to hell and can take a really long time to recover from when lots of suppliers start failing. [1] https://en.wikipedia.org/wiki/Beer_distribution_game https://en.wikipedia.org/wiki/Beer_distribution_game
- brohoolio 6y ago
  EACH of those F-150 plants is a fortune 50 company. You are talking about cutting production by 1/3 at one plant and 2/3 at the other plant. It’s a big deal.
Jkvngt 6y ago
F-150's are the classic work truck. Business is down across most sectors these days, work trucks aren't getting the wear and tear. And I'd wager that with so many people being either out of work or on reduced hours, driving in general is down.
- imposterr 6y ago
  Is work down? At least where I am, even during the strictest parts of lockdown construction never stopped. And so many people are starting renovation projects that's the price of things like lumber has gone up significantly.
  - Jkvngt 6y ago
    Yes work is down. Total economic output is down. Many people are working from home, which means less driving. This isn't controversial.
    - asguy 6y ago
      How many people doing exclusively remote work would be driving an F-150 otherwise? From where I’m sitting, west coast, construction and public works projects are up during the pandemic, not down.
      - Jkvngt 6y ago
        While personal anecdotes are fun, the numbers tell a different story.
        tharkun__ 6y ago
        Show us those numbers. And be sure to make it numbers with a breakdown by industry because that was what was mentioned before. I can say that where we are here, there was a stop on construction projects for some time but they were the first to be allowed back to work. So that's two anecdata (Canada here). And we've not had problems getting home based services taken care of even during the tightest lockdown restrictions. If the dish washer breaks down, you gotta get a new dish washer and your dish washer guy is likely to drive an F-150 (or a similar-ish type car).

36 points by totalZero 6y ago

>The automaker said Thursday that its Dearborn Truck Plant in Michigan will drop to one shift from three for a week beginning Monday, while truck production at its Kansas City Assembly Plant in Missouri will drop to two shifts from three. Ford spokeswoman Kelli Felker said both plants are expected to return to three shifts the week of Feb. 15. So they're cutting production by a few shifts for a week? That hardly seems like a significant change.

totalZero 6y ago
Cutting production to 33% on one line and 66% on another for their crown jewel F-150. The company reports earnings today after the market closes, so I read the "for a week" part as calm optimism. Same goes for the "this could be over after the first half of 2021" comments (paraphrasing) from Ford and others affected by chip shortages. If demand stays high, then the only way out of this shortage is to build more fabs, and that takes time. Bosch has been building a fab for the past 3 years and AKM had to outsource to Renesas because its production was affected by a factory fire.
- toomuchtodo 6y ago
  Are there any resources you could recommend on the root cause(s) of these semiconductor shortages?
  - PhantomGremlin 6y ago
    One other root cause, which I haven't seen mentioned yet, is that the purchasing clowns at the automakers cancelled chip orders last year after the pandemic hit. Oops. The automakers love to fuck over their suppliers like this. But, sucks for them, those same chip makers have other customers who continued to order chips. Which, in production volume, can have leadtimes of 26 weeks or more.
  - Jkvngt 6y ago
    Trump's ban on the export to China of certain materials and substances necessary for the manufacture of semiconductors is still in effect. Maybe China is prioritizing their use for military projects? Perhaps they have also sourced them from other foundries which had them on hand, using their substantial influence?
  - totalZero 6y ago
    AKM had a factory fire: https://www.prosoundnetwork.com/business/akm-factory-fire-shakes-up-pro-audio-industry https://www.prosoundnetwork.com/business/akm-factory-fire-sh... Hybrid and EV production is more semiconductor-laden than traditional ICE production: https://ihsmarkit.com/research-analysis/global-automotive-semiconductor-revenue-in-2020.html https://ihsmarkit.com/research-analysis/global-automotive-se... Total vehicle sales have entirely recovered after initially collapsing during the March 2020 lockdowns: https://fred.stlouisfed.org/series/TOTALNSA https://fred.stlouisfed.org/series/TOTALNSA Supply reliance upon TSMC and Samsung (customers include QCOM, NVDA, AMD, AAPL, MSFT) is a bottleneck that means CPUs, GPUs, SoCs, etc take longer to go from "oh there's more demand than expected" to "hey, that additional quantity just shipped": https://www.extremetech.com/computing/319580-amd-warns-xbox-ps5-pc-component-shortages-could-persist-into-summer-2021 https://www.extremetech.com/computing/319580-amd-warns-xbox-... Similarly, that bottleneck means that increased demand from one segment affects supply availability for all the others: https://www.scmp.com/tech/tech-trends/article/3120449/semiconductor-shortages-are-spreading-warns-smartphone-chip-giant https://www.scmp.com/tech/tech-trends/article/3120449/semico... Trump body-slammed China's chip industry: https://www.reuters.com/article/us-autos-tech-chips-focus/trumps-china-tech-war-backfires-on-automakers-as-chips-run-short-idUSKBN29K0GA https://www.reuters.com/article/us-autos-tech-chips-focus/tr...
    - InitialLastName 6y ago
      While the AKM fire made life hell for some in the fall, I don't think it had a lot to do with the overall semis shortage (the current market for audio codecs is insane, but differently so than the rest of the semi market). The bigger issue has been the rolling effects of the pandemic supply chain interruption. All these factories are operating on a just-in-time system. They carry 0 inventory (often getting multiple shipments per supplier per day straight onto the factory floor). Semiconductors happen to have a deeper depth of those steps (Mine silicon->build/process dies->doping->wirebonding and packaging->PCB assembly->final assembly) than most of the other bits, and every single step in that process has been running with effectively zero slack. Once there's a single interruption anywhere in the line, it echoes forever (see [1] Just in time works great when your suppliers don't have correlated failures. It goes to hell and can take a really long time to recover from when lots of suppliers start failing. [1] https://en.wikipedia.org/wiki/Beer_distribution_game https://en.wikipedia.org/wiki/Beer_distribution_game
brohoolio 6y ago
EACH of those F-150 plants is a fortune 50 company. You are talking about cutting production by 1/3 at one plant and 2/3 at the other plant. It’s a big deal.

Jkvngt 6y ago

F-150's are the classic work truck. Business is down across most sectors these days, work trucks aren't getting the wear and tear. And I'd wager that with so many people being either out of work or on reduced hours, driving in general is down.

imposterr 6y ago
Is work down? At least where I am, even during the strictest parts of lockdown construction never stopped. And so many people are starting renovation projects that's the price of things like lumber has gone up significantly.
- Jkvngt 6y ago
  Yes work is down. Total economic output is down. Many people are working from home, which means less driving. This isn't controversial.
  - asguy 6y ago
    How many people doing exclusively remote work would be driving an F-150 otherwise? From where I’m sitting, west coast, construction and public works projects are up during the pandemic, not down.
    - Jkvngt 6y ago
      While personal anecdotes are fun, the numbers tell a different story.
      - tharkun__ 6y ago
        Show us those numbers. And be sure to make it numbers with a breakdown by industry because that was what was mentioned before. I can say that where we are here, there was a stop on construction projects for some time but they were the first to be allowed back to work. So that's two anecdata (Canada here). And we've not had problems getting home based services taken care of even during the tightest lockdown restrictions. If the dish washer breaks down, you gotta get a new dish washer and your dish washer guy is likely to drive an F-150 (or a similar-ish type car).