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Photos of thousands of new and unsaleable Ford F-150s parked in parking lots in at least three states expressed the semiconductor shortage in real and financial terms. Ford’s pain was particularly terrible; CEO Jim Farley said nine of Ford’s Tier 1 vendors were relying on chips from a single chipmaker that suffered a fire in its clean room. This break in the supply chain is breaking the knees of Ford’s star player. Earlier this month, the Detroit Free Press reported that the automaker had secured a supply of chips that would allow it to ship thousands of trucks to dealerships and keep production lines running. Now, Automotive News reports that Ford is discussing an idea with dealers to ship trucks before the chips are installed. All dealerships receiving such vehicles would get training for service personnel on how to install the equipment and reimbursement of nearly one hour of labor for each repair. This is just an idea for now, and if it becomes a reality, only dealers who agree to the plan will receive unfinished trucks.
A pair of important questions require satisfactory answers before they have a chance to leave the whiteboard. Dealers won’t want the obligation to pay and insure trucks on their lots that they can’t sell and, more importantly, they won’t know when they can sell. Profits and losses hate these kinds of scenarios. Some dealers are also reluctant to accept responsibility for such repairs. Chips large enough to make a truck unsaleable when those chips are missing will control important systems, and possibly many. If there is a problem, clients and their attorneys will investigate any potential connection to the chips installed by the dealer.
Ford F-Series sales fell only 1.5% through the end of June compared to 2020. However, F-150 sales in June fell 26.9% from 2020, and these figures relate to the pandemic year. Given the current astronomical demand in the new car market today, Ford has a strong incentive to spit with dealers until they come to a mutually beneficial deal on minimizing the time between finishing trucks and selling them. And Ford sure is tired of paying places like Kentucky Speedway to park flocks of its golden geese. A Ford spokesperson would only say Automotive News, “We are exploring a number of different options as we work to get our customers and dealers with their new vehicles as quickly as possible. “
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