Ford Motor Co is curbing its North American vehicle production this week due to a semiconductor shortage, US media reported on Saturday, while Volkswagen AG is cutting many night shifts.
Ford plans to suspend production of vehicles including the Ford Bronco, the popular F-150 pickup and the new Mustang Mach-E electric vehicle at its plants in Michigan, Illinois and Mexico, CNBC and other media said.
Production is to be slowed at other facilities in Missouri, Michigan and Kentucky, while overtime is to be eliminated at Ford’s operations in Oakville, Canada.
Photo: Reuters
A shortage of semiconductors — essential vehicle components primarily manufactured in Asia — has affected automobile production since the beginning of the COVID-19 pandemic, causing prices to spike and contributing to surging US inflation.
US President Joe Biden, keen to boost his country’s auto manufacturing, wants to bring semiconductor chip production back to the US and has held several events to promote massive domestic investments.
Meanwhile, US lawmakers on Friday voted to approve legislation aimed at facilitating tens of billions of dollars in chip research and manufacturing, countering China’s growing influence and easing a global shortage of computer chips.
Late last month, high-tech giant Intel announced that it would begin construction late this year of two semiconductor factories in Ohio, with the aim of producing chips by 2025.
Biden called the US$20 billion investment “historic.”
In Germany, Volkswagen plans to cut nearly all night shifts at its main plant as Europe’s largest automaker continues to battle the semiconductor crisis.
Volkswagen is to cut the night shift, for which workers receive extra pay, from the start of the second quarter on three assembly lines in Wolfsburg, the automaker said on Friday.
The move has drawn ire from Volkswagen’s labor head Daniela Cavallo, who said a compromise on compensation must be found.
“Our colleagues aren’t responsible for the fact that order books are overflowing while we can’t make the vehicles because of the lack of semiconductors,” Cavallo said in the post. “We’ll fight for partial compensation.”
Only a fourth assembly line that handles the Tiguan and its hybrid models, the Touran and Seat Tarraco, are to run early, late and night shifts, Volkswagen said.
Volkswagen CEO Herbert Diess hinted at job cuts in November last year to stay competitive in the face of Tesla Inc and the shift to electric vehicle production. The global shortage of chips forced Volkswagen to slash output at the sprawling Wolfsburg factory last year.
The decision to cut the night shift was made in response to repeated short-notice cancelations and the need to furlough workers, the company said.
“It is unavoidable that we adjust our shift model to maintain competitiveness and secure jobs in the long term,” said Gunnar Kilian, the board member in charge of personnel.
“Unfortunately, this step will also involve workforce cuts and the loss of hardship allowances for the night shift,” he added.
Additional reporting by Bloomberg
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