Wednesday, March 30, 2022

Ford Stops Building Mustangs For Endlessly Frustrating Reason

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The good news is that the stoppage won't last long.

The auto industry's problems from 2021 have continued into 2022. Next year may be no different. The world is continuing to fight its way out of the coronavirus pandemic and the resulting supply chain issues affecting basic goods and new vehicles. Automakers have been dealing with a semiconductor chip shortage, a crucial component required for final vehicle assembly. Major money-makers like trucks and SUVs have received chip priority over traditional sedans and sports cars, and Detroit's muscle cars, such as the Ford Mustang, haven't been immune, with Mustang production now shut down again after a stoppage early in 2021.

The Detroit News reports that the Flat Rock Assembly Plant, home of the Mustang, has been offline all week due to a lack of chips. A company spokesperson said that production is currently scheduled to resume next week.

Hopefully, that won't change but given the current environment, anything could happen. It's not only American automakers affected by the shortage. Toyota, for example, also confirmed earlier this week that it doesn't expect to reach its manufacturing target of 9 million vehicles for the fiscal year through March.

This is quite the contrast compared to the beginning of the global chip shortage when Toyota announced it had a healthy chip supply on hand. The Japanese automaker began stocking up on chips a few years ago following lessons learned from the 2011 tsunami that devastated parts of Japan. Toyota suffered severe supply issues at the time and stocking up on those chips, an expensive endeavor, became company policy. Ford CEO Jim Farley previously predicted the chip crisis isn't likely to end before 2023.

Other auto industry executives share his outlook. But the good news is that chip production is in the process of being moved to the US, in contrast to importing chips from Asia. This major supply chain change will be beneficial in the years ahead as automakers continue to transition to fully electric vehicles. Like their ICE counterparts, EVs rely on these chips for numerous functions though engineers are working to create methods where modern vehicles require fewer overall chips.

While the long-term outlook for resolving the crisis looks good, the short-term effects, like factory workers being sent home with less money in their pockets, are still being felt.