3,900 Ford UAW members building Escape, Corsair lose work hours due to parts shortage

Thousands of UAW members will be off work next week as Ford Motor Co. shuts down its Louisville Assembly Plant, which builds the Ford Escape and Lincoln Corsair, because of an inability to get parts.

While COVID-19 hasn’t shuttered factories nationally, the pandemic continues to have impact on the supply chain.

“We are working closely with suppliers to address potential production constraints tied to the global semiconductor shortage,” Kelli Felker, Ford global manufacturing and labor communications manager, confirmed to the Free Press.

The company has scheduled a “down week” next Monday through Sunday and notified the UAW, Felker said. She confirmed an estimated 3,900 workers would be affected.

“From what we are hearing right now, it’s (only) a week,” Todd Dunn, president of UAW Local 862, the union for hourly workers at the plant, told WDRB-TV in Louisville

UAW members will receive approximately 75% of their gross pay during the down week, Felker said.

Automakers use semiconductors, or chips, for automation, electrification, digital connectivity and security — for everything from computer management of the engine to driver-assistance such as emergency braking.

“In the automotive sector, the adoption of safety-related electronics systems has grown explosively,” wrote Deloitte consulting in 2019. “Semiconductor components that make up these electronic systems will cost $600 per car by 2022.” 

Meanwhile, General Motors is monitoring the shortage closely.

“We are aware of the increased demand for semiconductor microchips as the auto industry continues its global recovery,” said David Barnas, GM spokesman. “Our supply chain organization is working closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM production.”

He declined to say whether operations had been disrupted.

Fiat Chrysler feels pinch

Fiat Chrysler Automobiles is dealing with the microchip shortage, too.

“As a result, we have taken the decision to delay the restart of our Toluca, Mexico, plant, which builds the Jeep Compass, and schedule down time at our Canadian plant in Brampton, Ontario, which builds the Chrysler 300, Dodge Charger and Dodge Challenger,” said FCA spokeswoman Kaileen Connelly. “This will minimize the impact of the current semiconductor shortage while ensuring we maintain production at our other North American plants.”   

The plants will be closed through the end of January, she told the Free Press.

Autos vs. Apple

Global consolidation of vehicle production, driven by improving economies of scale and lowering costs, can dramatically affect supply chain challenges, said Joe McCabe, CEO of AutoForecast Solutions based in Chester Springs, Pennsylvania.

So Ford is not alone.

“In this case, as vehicles increase their electronic content and capability, they are not just competing with other vehicle manufacturers but now competing deeper with other industries needing the same resources,” McCabe said. “Expect to see this trend continue during the push for more automotive electrification.”

And when computers and phones need much more volume of semiconductors than vehicles, bottlenecks will occur; especially post-pandemic, he said.

Analysts expect vehicle manufacturers to allocate this scarcity of semiconductors to their more profitable vehicles at the expense of the less profitable ones, McCabe said. “Remember, the pandemic caused everyone to shut their doors. It did not discriminate between types of manufacturers. So as everyone’s doors reopen at the same time, the race for not only financial strength but long-term survival is paramount.”