Ford Stops Maverick And Bronco Sport Production

Industry News / Comments

The global semiconductor chip shortage is to blame.

Ford will temporarily suspend production at the Hermosillo plant in Mexico.

The Hermosillo facility is tasked with producing the Ford Bronco Sport and the Ford Maverick. Both vehicles are in high demand and volume cars for Ford USA. The first round of production Mavericks arrived at dealers less than a month ago. We reported earlier that Ford might struggle to meet demand, as the Maverick secured 36,000 reservations during its first week on sale. Demand for Ford's Bronco Sport has also never been higher.

Ford has yet to comment, but Reuters spoke to the plant's labor union, who confirmed that the temporary suspension is due to a material shortage.

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During the pandemic, chip manufacturers started manufacturing parts for products in high demand, including computers, smartphones, televisions, and gaming consoles. Basically, everything people used to keep themselves busy during the lockdown. This led to the current semiconductor shortage crisis, which already halted production at the Hermosillo plant for two days earlier this month.

The union could not confirm how long the suspension would last, but employees would be paid 75% of their salaries.

In late August, Ford also suspended production at its Oakville Assembly Plant in Canada and Missouri's Kansas City Assembly Plant.

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It's not clear how long this global shortage will last, as we've received mixed feedback from manufacturers. Mercedes-Benz thinks the shortage will last until 2023, while Hyundai thinks the shortage won't worsen.

One thing is for sure. The shortage is having a massive impact on car prices. Manufacturers are pushing the production of vehicles with a high profit margin. This, in turn, has increased the average price of new cars sales to an all-time high.

GlobalFoundries, a US-based chipmaker, will double its production in the future, but that will require expanding its production facility. GlobalFoundries is already on track to double its production in 2021, but the increase will only start having a real impact in 2023.

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Source Credits: Reuters

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