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Ford cuts production outlook in half over chip shortage woes

In the second quarter of this year, Ford may build 50% fewer vehicles without the necessary semiconductor chips.

2021 Ford F-150 towing
The chip shortage is going to cost Ford -- and every major automaker.
Nick Miotke/Roadshow

As the semiconductor chip shortage shows no sign of letting up, automakers are increasingly facing up to reality. Ford, for example, thinks it will build half as many cars as it first expected in the second quarter of this year. Underscoring how much impact this may have on the company, Ford originally said it only planned to lose 17% of its planned production due to the shortage.

The automaker provided its outlook as part of its first quarter 2021 financial results on Wednesday. No problems there -- in fact, the Blue Oval swung to a $3.3 billion net profit. 

But the chips are a major concern. The company explicitly said it doesn't believe the shortage will be entirely resolved until 2022, though it's hopeful supplies from Japan will start to rebound towards the end of Q2. When things do settle down, Ford estimates the shortage will cost it around $2.5 billion with 10% of planned production shaved off in the second half of 2021.

Ford recently took steps to idle various factories and even hold its crown jewel -- the F-150 -- at the factory while it waits for critical chips to install in vehicles. It's not alone. Nearly every major automaker has put plant shutdowns into effect because without chips, companies aren't building a functioning car ready for sale.