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Light at the end of the chip shortage.....hope this is true....


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13 hours ago, akirby said:

 Since they’re still building the more profitable vehicles with few to no incentives it might not be as bad financially as we think.  .

 

Actually, they're not:

In a memo to employees obtained by Automotive News and confirmed by Ford, the automaker said its Dearborn Truck Plant in Michigan and the truck side of its Kansas City Assembly Plant in Missouri will be idled the weeks of May 31 and June 7. They will also operate on a reduced schedule the week of June 14.

Additionally, Chicago Assembly, where workers build the Explorer and Aviator crossovers, will be down the week of May 31 and will be on a reduced schedule the week of June 7.

https://www.autonews.com/manufacturing/ford-will-idle-both-f-150-plants-2-more-weeks?utm_source=breaking-news&utm_medium=email&utm_campaign=20210519&utm_content=hero-headline

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On 5/20/2021 at 11:43 AM, FordBuyer said:

Ford seemed to get most of its chips from plant in Japan that burned down. That plant will reportedly be back on line in July. 

 

Ford is also going to redesign its components to accept chips from many different suppliers so that one plant going down doesn't screw them.

 Ford got out of the electronics business when they spun off Viteon.  I don't know how much pressure they can really put on their module suppliers to change designs, especially if it means changing software also (most software is just "spec'd" to the module suppliers. Who knows who actually writes it).

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On 5/20/2021 at 2:08 PM, ice-capades said:

I think there's a lot of PR spin going on to make people think the chip shortage will be solved in the next few months. I'll believe it when I see it but think the shortage will continue to interrupt vehicle production through the end of the year.

I think that is optimistic !  It could easily continue through 2022 with spot shortages into 2023 and beyond !

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On 5/22/2021 at 8:04 PM, jpd80 said:

How many one off events have to happen before a corporate recognises it’s exposure with critical parts supply.

Toyota was hit a while back and actually did something ( up to four months supply of chips)

The supply chain is very different in Japan.  Ford has very little leverage to get their module suppliers to spending big $$$ on inventory for chips that may never get used !

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3 hours ago, Harley Lover said:

 

Actually, they're not:

 

I'm aware F150 production is impacted.   What I meant was they're diverting more of the available chips to the more profitable vehicles and less or none to the less profitable vehicles thereby increasing profit margins even though overall sales will be down significantly.

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Hopefully Ford will learn a lesson in JIT is not always the best approach.

I really hope, but I doubt it, Ford will learn something about customer and dealer communications. Right now they are starting at "Ground Zero" so not much has to be done to create significant improvement.

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Figured these comments from Farley from the other Lightning thread apply here too....

 

Q: You have said the global semiconductor shortage will halve your normal production in the second quarter. Do you see that shortage ending this year?

A: These components are a high percentage of our build-of-material these days, and we can’t really continue to run just-in-time inventory on components like this. It’s a real game changer in how we look at our supply chain. We are seeing some positive indications from chip producers. The big change is the Renesas facility (a chip factory in Japan that was damaged by fire) coming back online. As that facility ramps up to 100%, we'll feel a lot more confident. So we’re not through this. I’m not going to give any predictions about what the second half looks like.

 

Q: You've mentioned that you may buy chips directly from the factories and stockpile them. Is this going to change the way Ford buys critical parts?

A: I really do think so. This is a really significant event. It’s not really black swan events, Renesas is, but it's really more kind of dealing with the realities of a different supply chain focused on electronic components. Silicon is a big part of every vehicle. I do think that everything’s on the table. We’ve also learned that you have to engineer flexibly for these components. You may have to have a design on the shelf in case something runs lean.

 

 

 

 

So looks like they are considering/making changes to the JIT processes for at least certain components.

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6 hours ago, theoldwizard1 said:

The supply chain is very different in Japan.  Ford has very little leverage to get their module suppliers to spending big $$$ on inventory for chips that may never get used !


And that's why Just In Time works so much better there than it does here 

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After Toyota got bitten a few years back, it managed to negotiate up to four months supply of chips.

 

Its not that it can’t be done, more the fact that everyone just assumed that JIT will run like clockwork and the savings from eliminating warehouses will outweigh any of the glitches in supply. Sometimes companies have to feel the pain before things change....

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13 hours ago, theoldwizard1 said:

The supply chain is very different in Japan.  Ford has very little leverage to get their module suppliers to spending big $$$ on inventory for chips that may never get used !

Worked for a time manufacturing materials used in electronics. Japanese companies were suppliers and some were potential customers. In all of the dealings there was always a representative of a "trade company" or Sogo Shosha present. Amongst my company, referred to them being "the five families" of Japan. If this still prevails, to whom do they supply chips? Member of their trading family, or some Gaigin (outsider)?  

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Seems optimistic, but I sure hope this gets resolved soon... I sure do feel for the workers and dealers etc which have to be getting hit pretty hard....

And yeah... I'd kinda like my truck before 22's hit the lots. Lol

Edited by Rondalon
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Renasas expects to have their fab back to full capacity by the end of May.  That is likely wafer starts, so another quarter or two after that for final chips.  Extra supply from other fabs will come as auto manufacturers increase the price they are willing to pay.

 

it has gotten many out of the big rebate and incentive to move the metal game.

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13 hours ago, paintguy said:

Worked for a time manufacturing materials used in electronics. Japanese companies were suppliers and some were potential customers. In all of the dealings there was always a representative of a "trade company" or Sogo Shosha present. Amongst my company, referred to them being "the five families" of Japan. If this still prevails, to whom do they supply chips? Member of their trading family, or some Gaigin (outsider)?  

Clearly sales of chip go to members of the Soho Shosha.

 

When EFI started showing up in high volume in the 1980s, Nippon Denso, was THE major supplier of components.  Anyone outside of that "family" simply could not buy from them.

Edited by theoldwizard1
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20 hours ago, rmc523 said:

Figured these comments from Farley from the other Lightning thread apply here too....

 

Q: You've mentioned that you may buy chips directly from the factories and stockpile them. Is this going to change the way Ford buys critical parts?

A: I really do think so.

Ford does not MANUFACTURE any electronics.  At best they woul purchase a few months worth of chips and gave them stockpiled at the facility that does the manufacturing.

 

As for switching suppliers of chips it has its own perils.  Long ago when Ford did make their own electronics, purchasing switched supplier to a different company just before production.  This was on a module that controlled the ride height of some Lincoln vehicles.  Long story short, the part was not identical in all operating conditions costing Ford millions of dollars in burnt up cars and garages.

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On 5/25/2021 at 11:41 PM, theoldwizard1 said:

Ford does not MANUFACTURE any electronics.  At best they woul purchase a few months worth of chips and gave them stockpiled at the facility that does the manufacturing.

 

As for switching suppliers of chips it has its own perils.  Long ago when Ford did make their own electronics, purchasing switched supplier to a different company just before production.  This was on a module that controlled the ride height of some Lincoln vehicles.  Long story short, the part was not identical in all operating conditions costing Ford millions of dollars in burnt up cars and garages.

I think you misunderstood that quote, Ford is looking at paying for a stockpile of chips

so that the ECU supplier doesn’t carry that cost burden and has several months of the

right chips for a submitted build plan. That way, everyone is on the same page.

 

 

Edited by jpd80
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On 5/28/2021 at 4:35 PM, jpd80 said:

I think you misunderstood that quote, Ford is looking at paying for a stockpile of chips

so that the ECU supplier doesn’t carry that cost burden and has several months of the

right chips for a submitted build plan. That way, everyone is on the same page.

 

 

Safety Stock? What a concept!

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10 hours ago, FordBuyer said:

It's starting to look like the best Ford can hope for is a gradual improvement in production numbers over many months as more chips come in. Looks like GM is already seeing an improvement. No easy fix.....just gradual improvement. 

While inventory may stay low, I bet they deliver every stick of new production they can muster. It’s going to feel really tight for the next six to eight months.

Edited by jpd80
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9 hours ago, jpd80 said:

While inventory may stay low, I bet they deliver every stick of new production they can muster. It’s going to feel really tight for the next six to eight months.

 

Intel Corp's CEO said yesterday that it could take several years for a global shortage of semiconductors to be resolved. 

https://www.foxbusiness.com/technology/intel-reiterates-chip-supply-shortages-could-last-several-years

 

No doubt that Ford will produce every vehicle they can and F-Series will remain the highest priority to maintain profits and sales leadership. 

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1 hour ago, twintornados said:

 

I suspect that is just him boosting the profit margins for his product....

I suspect you are correct. He admitted that they used their excessive profits for Stock Buybacks instead of R&D. He also stated Intels products were 2-3 years behind their competition in terms of technology.

After watching that 60 minute program featuring Intel, I don't put much stock in what he has to say.

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1 hour ago, twintornados said:

 

I suspect that is just him boosting the profit margins for his product....

 

I'm not so sure about that. The pandemic caused tremendous pent up demand for all types of consumer products besides automotive... appliances, computers and just about any product that uses semiconductors. It still takes months to get many appliances and the order-to-delivery time for a new desktop is a month, graphics cards are in short supply... and prices for computer components are going through the roof, if you can find them. 

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5 minutes ago, Gregg Tonkin said:

I suspect you are correct. He admitted that they used their excessive profits for Stock Buybacks instead of R&D. He also stated Intels products were 2-3 years behind their competition in terms of technology.

After watching that 60 minute program featuring Intel, I don't put much stock in what he has to say.

 

Yes, Intel is playing catchup to their computers but their stock buybacks instead of increased R&D investment isn't what's affecting or created the general microchip shortage across so many industries that are trying to react to the tremendous increase in demand for consumer products. 

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3 minutes ago, ice-capades said:

 

Yes, Intel is playing catchup to their computers but their stock buybacks instead of increased R&D investment isn't what's affecting or created the general microchip shortage across so many industries that are trying to react to the tremendous increase in demand for consumer products. 

I didn't say it did, just responding to the prior post. 

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