The Blue Oval has struggled to match supply with overwhelming demand for virtually its entire lineup for well over a year now, a situation that has essentially become a long term issue for the company, and for the entire industry as well. Unfortunately, the supply chain crisis has no end in sight, as Ford CEO Jim Farley has stopped predicting when things might return to some semblance of normalcy. Additionally, he recently took the time to detail why the company failed to secure enough chips to sustain its manufacturing operations, per a new report from Bloomberg.
Speaking at the 2022 Semiconductor Industry Association dinner, Farley said that the crux of the matter is (and was) a lack of communication between the automaker and the companies that manufacture the chips that The Blue Oval desperately needs. “It’s too painful. We need to understand your technology roadmap better,” he said. “And we need supply chain people from your companies and our companies to get it right.”
At issue are the older chips that are responsible for simple tasks like operating the windshield wiper system in a vehicle. An inadequate supply of metal-oxide-semiconductor field-effect transistor (MOSFET) chips for the Ford F-150 resulted in the company losing out on 40,000 units of production. Additionally, the shortage has cost Ford 1.3 million vehicles since the start of the shortage. Unfortunately, the industry is less interested in producing legacy chips, as they bring less profits, which has led to a slower ramp up in production capacity. Farley said that the company failed to appreciate where the semiconductor industry was heading.
As Ford Authority previously reported, the automaker has entered into a non-binding agreement with GlobalFoundries regarding chip supplies and discussions about research and development initiatives. Earlier this year, Farley also said that Ford will sign more deals with chipmakers in the future. Currently, Ford has a sizable number of “vehicles on wheels” currently sitting at various lots waiting for chips and other parts, although it expects to deliver those vehicles to dealers by the end of the fourth quarter. Ford CFO John Lawler has said that the shortage will continue through 2023.