The ripple effects of the pandemic are as many as they are surprising. Who would have thought that in 2021 the venerable Ford Motor Company would be forced to slash production by 50% because of a shortage of tiny silicon chips?
Ford, as a public company, reports its financial results every three months. The latest such public confession was on Wednesday. Ford announced the period just passed was surprisingly good, but the upcoming year faces big problems.
Ford will send workers home and put its factories on idle because it will be producing 700,000 fewer cars in the next three months, a 50% fall in production. This comes on top of a 17% fall in production in the first quarter of the year. That’s a monstrous change in output, and the company forecasts “limited opportunity to recover lost production within 2021”. They expect the chip shortage will last until 2022 and cost them $2 billion in lost sales.