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Ford CEO Farley calls chip shortage ‘greatest supply shock’

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DETROIT — Ford Motor Co. CEO Jim Farley said the worsening semiconductor lack has prompted “maybe the finest source shock” he is ever noticed, as vendor plenty dry up and the firm juggles creation shutdowns across the world.

Talking to Automotive News Group Publisher KC Crain as aspect of Automotive News‘ Congress Discussions series, Farley said the issues are equivalent to what the business faced in the early times of the coronavirus pandemic.

“As terrifying and tricky and demanding as the early times ended up in COVID, the existing source shock is just as frustrating, if not a lot more frustrating, for our team,” Farley said. “Every person is making an attempt to do their very best to deal with the constraints. It reminds me of the early times [of the pandemic] when we had to appear up with the playbook. That’s how huge of a function assertion this source chain shock is.”

Ford, alongside with other automakers, has been compelled to halt creation at a variety of vegetation in recent months mainly because of the shortage of microchips that assist electricity a variety of capabilities within just a auto. It also has resorted to making F-150s without the need of the chips and storing them in plenty until eventually a lot more source results in being available.

Dealers are experience the strain as stock dwindles. One retailer just lately told Automotive News: “It can be heading to be a rather determined April.”

Farley said the crisis has led Ford to rethink how it sources critical components this kind of as chips and that he has put in the earlier many weeks benchmarking other industries to see irrespective of whether there are any takeaways for Ford.

“What I’ve noticed is a couple of essential themes,” he said. “Most other industries use security inventory for critical components like chips. And the other just one is they have many sourcing. And many of these providers spend for chips upfront a long time and a long time in advance of the potential requirements. So there is a ton of classes to be learned for our total business.”

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