The rolling catastrophe that is the semiconductor chip shortage recently prompted Ford to make even more cuts to its production schedule, and the automaker fully expects about half of its Q2 output to evaporate as it faces a major parts shortage in the near term. Invested stakeholders have started to brainstorm ways to avoid another crisis of this magnitude in the future, and while not much can be done to quickly resolve the situation, the Biden administration has been reasonably proactive in facilitating a dialogue between chip makers and buyers, a move that will escalate in the future, per a report from Bloomberg.
While no concrete plan currently exists, the Biden administration wants to formulate an initiative of sorts to facilitate communication between the companies that produce microchips and the ones that use them in their products. The dialogue would mainly focus on more transparent disclosures around the supply of chips, presumably so companies could better prepare themselves in the event of a future shortage. While this plan seems far too simplistic on its face, it represents a major shift in supply chain strategy, as automakers like Ford have rarely needed to communicate with chip makers, as suppliers previously handled such inquires.
That changed after the current COVID-19 related production snafus threw the old way of doing things out the window. To make matters worse, a fire at a Renesas plant in Japan took even more chips out of equation for The Blue Oval, as nine of its Tier 1 suppliers relied on the output of that plant to supply them with the needed electronics.
In any event, Ford CEO Jim Farley has already interacted with the Biden administration directly, attending a summit on the chip shortage earlier this year. But the crisis is massive in scope, which is why the U.S. Senate is currently working on legislation to help mitigate future chip bottlenecks by providing funding for domestic chip production.
We’ll continue to cover the chip shortage and report back when we have more information, so subscribe to Ford Authority for 24/7 Ford news coverage.
Biden needs to take care of the BORDER AND PROTECTIONG AMERICA and not sticking his nose where it does not belong. Biden has caused more problems for the working class small business owners than anyone in history.
Absolutely! That’s why we need manufacturing HERE in the USA !!!
Unfortunately China Joe sold his soul to the Chinese a long time ago. We need Trump and his policy’s back,soon !
Why don’t you fools stay on social media platforms that feed you all the conspiracy theories you can handle and leave this to us guys who love their trucks and sport car. But that said. Gee an infrastructure plan might actually be the best thing for this country 🤔.
Farley appears to be actively engaged in preserving FORD in the face of a very difficult time all brought on due to Covid-19. And yes, this is a FORD car blog. For those of you that can’t /won’t stay on topic…. get off the platform and get out of your basement…. you need some vitamin D. ha ha!
Yes, manufacturing here in USA is better & costs more, but when the government is involved, it also brings with it typical government inefficiencies & exorbitant costs.
I think engineers shouldn’t base their designs on one processor with no alternatives designed. Tesla vaguely hinted that they redesigned their boards on what chips were available to avoid the crunch.