Back in February, Ford CEO Jim Farley said that he believed that the global microchip shortage, which has severely disrupted the automaker’s production for months, would be essentially over by Q3 of 2021. Others have echoed this sentiment, but as the weeks go by, it seems that expectations are changing. In fact, some now believe that the global microchip shortage could go on for years.
“I have been in this industry for 31 years, and this is a situation I have never experienced before,” president of the automotive division at Infineon Technologies, Peter Schiefer, told Automotive News. “This will not be sorted out in the next few weeks.”
“The latest incoming information suggests that production disruptions will be more severe than initially thought,” added LMC Automotive analyst James Norris. “The shortage is expected to drag on until the closing months of 2021 and undermine the capacity for automakers to catch up lost volumes in the second half.”
If these predictions come true, it’s expected that the automotive industry could see production cuts of up to two or three million vehicles this year across the entire globe. Ford recently saw cuts of 44,000 vehicles in just one week, as we recently reported.
Meanwhile, FoMoCo is rethinking its supply chain strategy in light of the chip shortage, focusing on stockpiling critical parts instead of sticking to a just-in-time philosophy. Jim Farley will also attend today’s White House summit, along with other major automaker executives and chipmakers, as the group attempts to find a solution for this ongoing issue.
In recent weeks, Ford has temporarily shut down a number of its production plants, suspended overtime, and most recently canceled summer shutdowns at most of its U.S. plants as it looks to make up for all of these production losses.