Ford cuts F-150 pickup truck production due to semiconductor chip shortage | Hacker News Reader

Ford cuts F-150 pickup truck production due to semiconductor chip shortage

cnbc.com

36 pointstotalZero22 comments

>The automaker said Thursday that its Dearborn Truck Plant in Michigan will drop to one shift from three for a week beginning Monday, while truck production at its Kansas City Assembly Plant in Missouri will drop to two shifts from three. Ford spokeswoman Kelli Felker said both plants are expected to return to three shifts the week of Feb. 15.

So they're cutting production by a few shifts for a week? That hardly seems like a significant change.

Cutting production to 33% on one line and 66% on another for their crown jewel F-150.

The company reports earnings today after the market closes, so I read the "for a week" part as calm optimism. Same goes for the "this could be over after the first half of 2021" comments (paraphrasing) from Ford and others affected by chip shortages. If demand stays high, then the only way out of this shortage is to build more fabs, and that takes time. Bosch has been building a fab for the past 3 years and AKM had to outsource to Renesas because its production was affected by a factory fire.

Are there any resources you could recommend on the root cause(s) of these semiconductor shortages?

Trump's ban on the export to China of certain materials and substances necessary for the manufacture of semiconductors is still in effect. Maybe China is prioritizing their use for military projects? Perhaps they have also sourced them from other foundries which had them on hand, using their substantial influence?

AKM had a factory fire: https://www.prosoundnetwork.com/business/akm-factory-fire-sh...

Hybrid and EV production is more semiconductor-laden than traditional ICE production: https://ihsmarkit.com/research-analysis/global-automotive-se...

Total vehicle sales have entirely recovered after initially collapsing during the March 2020 lockdowns: https://fred.stlouisfed.org/series/TOTALNSA

Supply reliance upon TSMC and Samsung (customers include QCOM, NVDA, AMD, AAPL, MSFT) is a bottleneck that means CPUs, GPUs, SoCs, etc take longer to go from "oh there's more demand than expected" to "hey, that additional quantity just shipped": https://www.extremetech.com/computing/319580-amd-warns-xbox-...

Similarly, that bottleneck means that increased demand from one segment affects supply availability for all the others: https://www.scmp.com/tech/tech-trends/article/3120449/semico...

Trump body-slammed China's chip industry: https://www.reuters.com/article/us-autos-tech-chips-focus/tr...

While the AKM fire made life hell for some in the fall, I don't think it had a lot to do with the overall semis shortage (the current market for audio codecs is insane, but differently so than the rest of the semi market).

The bigger issue has been the rolling effects of the pandemic supply chain interruption. All these factories are operating on a just-in-time system. They carry 0 inventory (often getting multiple shipments per supplier per day straight onto the factory floor). Semiconductors happen to have a deeper depth of those steps (Mine silicon->build/process dies->doping->wirebonding and packaging->PCB assembly->final assembly) than most of the other bits, and every single step in that process has been running with effectively zero slack. Once there's a single interruption anywhere in the line, it echoes forever (see [1]

Just in time works great when your suppliers don't have correlated failures. It goes to hell and can take a really long time to recover from when lots of suppliers start failing.

[1] https://en.wikipedia.org/wiki/Beer_distribution_game

One other root cause, which I haven't seen mentioned yet, is that the purchasing clowns at the automakers cancelled chip orders last year after the pandemic hit.

Oops.

The automakers love to fuck over their suppliers like this. But, sucks for them, those same chip makers have other customers who continued to order chips. Which, in production volume, can have leadtimes of 26 weeks or more.

EACH of those F-150 plants is a fortune 50 company. You are talking about cutting production by 1/3 at one plant and 2/3 at the other plant. It’s a big deal.

F-150's are the classic work truck. Business is down across most sectors these days, work trucks aren't getting the wear and tear. And I'd wager that with so many people being either out of work or on reduced hours, driving in general is down.

Is work down? At least where I am, even during the strictest parts of lockdown construction never stopped. And so many people are starting renovation projects that's the price of things like lumber has gone up significantly.

Yes work is down. Total economic output is down. Many people are working from home, which means less driving. This isn't controversial.

How many people doing exclusively remote work would be driving an F-150 otherwise?

From where I’m sitting, west coast, construction and public works projects are up during the pandemic, not down.

While personal anecdotes are fun, the numbers tell a different story.

Show us those numbers. And be sure to make it numbers with a breakdown by industry because that was what was mentioned before.

I can say that where we are here, there was a stop on construction projects for some time but they were the first to be allowed back to work. So that's two anecdata (Canada here). And we've not had problems getting home based services taken care of even during the tightest lockdown restrictions. If the dish washer breaks down, you gotta get a new dish washer and your dish washer guy is likely to drive an F-150 (or a similar-ish type car).

Are you trying to gaslight me? What happened in the last year? What's the money supply look like?

I'm sure not much will come of my reply, but I will try once to make you think about it again and actually back up your claim. No gaslighting involved. You started the numbers talk by saying "While personal anecdotes are fun, the numbers tell a different story." The story itself talks about supply shortages of semi conductors, not of demand shortages because people aren't trying to buy F-150s.

So, do show us the numbers that you are talking about. I'm always for being educated and having numbers available.

Until then, I will go with the experience I have had and that of "asguy" and both of our experiences have been that F-150 driving work has not declined significantly from our point of view. In fact, I see two F-350s (!) right out my window across in the neighbor's driveway (both he and his son work in construction). And yes, they're busy.

I commented on a different branch of this thread with some numbers. Light truck sales in December 2020 exceeded light truck sales in any of the months prior to the pandemic.

Upon inspecting the data, your theory doesn't hold up. Ford's problem isn't demand, it's supply. Light truck sales data (including F-150) show that sales are at an all-time high: https://fred.stlouisfed.org/series/LTRUCKNSA

Vehicle-miles were down 10% for Nov 2020 (most recent month from FHWA) vs Nov 2019, that is true. https://www.fhwa.dot.gov/policyinformation/travel_monitoring...

However, people are still buying new and used cars.

New car sales in Dec were strong: https://www.goodcarbadcar.net/usa-auto-industry-total-sales-...

Used car prices last year spiked astronomically: https://www.npr.org/2020/10/28/927971920/a-pandemic-sticker-...

People don't really buy these trucks for work. The vast majority are just inefficient daily drivers/status symbols. Your not going to throw 2x4s and scratch the paint of your $50,000 pickup truck.

I threw 2x4s into the back of mine not too long ago. My brother uses his to work on houses and maintain a golf course. His friend uses his truck to transport large equipment between several buildings he works in. That friend's parents use their pick up to pull their camper since they retired.

None of us would strike you as "workmen" upon first seeing us pull up, and none of us bought these vehicles as status symbols.

Big time stereotyping here. I got a lightly used 2016 F-150 about 2 years ago, and it's easily the best and most useful vehicle I've ever owned. I never have to worry about arranging or paying for delivery when buying/moving/hauling larger items like furniture, lumber, etc. I have moved twice with it by hooking up trailers too, and have helped out several friends as well. It's just so damn useful.

I work remote so I don't daily drive, and I certainly don't have it for any kind of status symbol, as I sold my sports car for it that was easily a higher status symbol than the truck is.

There is a reason the F-150 is the best selling vehicle in America, and the most sold truck on planet Earth. A good one.

As with all of this its anecdotes, but out of my 9 friends with trucks only one uses his regularly for hauling hay. That one is a beat up truck that is barely road legal. The rest are as immaculate as when they left the showroom floor. Something might go in the bed once in a while, but if it were a pure financial decision they'd be better off renting a uHaul for the few times that happens.

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