LOUISVILLE, Ky. (WDRB) – Ford Motor Co.’s Kentucky Truck Plant will be down for two weeks beginning April 26 and will not run weekend overtime shifts in May, as the automaker continues to struggle to procure computer chips for its vehicles.
“The global semiconductor chip shortage is continuing to affect our plants in North America. We are working hard to build as many vehicles as we can for our dealers and customers, even as we work to source additional parts,” said John Savona, Ford’s vice president of manufacturing and labor affairs, in a memo to employees dated Wednesday.
This marks the first time that Ford’s larger Louisville plant, KTP, will suffer a full shutdown related to the chip shortage, which has plagued automakers globally.
KTP assembles some of Ford’s most profitable models: Super Duty pickups (F-250 to F-550) and the Ford Expedition and Lincoln Navigator SUVs. The plant's 8,620 hourly employees will be out of a job during the shutdown, though a union-negotiated benefit replaces much of their pay after unemployment benefits.
Michelle Krebs, executive analyst with Autotrader.com, said Ford is "cutting to the bone" by curtailing production of its "cash cow" vehicles, most notably the best-selling F-150.
As for the Super Duty trucks, Krebs said there is plenty of demand for Ford to build more.
"They're extremely profitable vehicles and I have been watching that inventory numbers fall precipitously of late. They don't have any sitting around on the lots to sell... That's a really good business for Ford," she said.
Analyst @MichKrebs says @ford is "cutting to the bone" when it slows production of F-150s and the Super Duty trucks made in Louisville. Krebs said there is plenty of demand for the big trucks. A clip from our Zoom: https://t.co/liayd6Oe6V pic.twitter.com/Aw14HndhqE— Chris Otts (@christopherotts) April 14, 2021
Ford’s other local plant, Louisville Assembly Plant, is in its fifth down week of 2021 and scheduled to be off again next week. LAP makes crossover SUVs, the Ford Escape and Lincoln Corsair.
Krebs said inventory is higher for the Escape and Ford has been selling a lot of a similar vehicle, the Bronco Sport.
WDRB News reported last week that a union official told members Ford was tentatively planning to idle KTP for the two weeks in late May. It wasn’t clear Wednesday whether that plan has changed given the earlier two-week shutdown starting April 26.
“It’s a very fluid situation,” Ford spokeswoman Kelli Felker said.
The chip shortage is having a widespread impact on Ford, which has previously said the reduced vehicle output could cost the company $1 billion to $2.5 billion in pre-tax profits during the first half of 2021.
Here are the shutdowns that Savona disclosed in Wednesday's memo:
- Chicago Assembly Plant will be down the weeks of April 19 and April 26. (This is in addition to the previously week of April 12)
- Flat Rock Assembly Plant will be down the weeks of April 19 and April 26. (This is in addition to the previously announced week of April 12)
- Kansas City Assembly Plant — both F-150 and Transit lines — will be down the weeks of April 19 and April 26. (This is in addition to KCAP Transit being down the week of April 12, as previously announced)
- Ohio Assembly Plant will produce Duty Chassis cabs and Medium Duty trucks only the weeks of April 19 and April 26
- Kentucky Truck Plant will be down the weeks Of April 26 and May 3, and we will not work super shifts the weeks of May 8, May 16, May 22, May 29 and May 31
- Individual Powertrain and Stamping plants will provide specifics around their patterns to support the assembly plants as they are confirmed.
The "super shifts" at KTP are Saturday and Sunday shifts during which workers are paid overtime.