Ford Motor Co. is the latest to be hit by the ongoing chip shortage. The chip shortage has been upending the industry for weeks, and its effects could drag into the 3rd quarter, according to IHS Markit. Ford will be forced to curtail its output of its bestselling and most profitable vehicle, the F-150 beginning next week. The timing is problematic for Ford as it ramps up production and deliveries of the redesigned F-150, which went on sale late last year.
Ford told Automotive News on Thursday that “its Dearborn Truck Plant in Michigan will drop to one shift from three the week of Feb. 8th, while the truck side of a Kansas City Assembly Plant in Missouri will drop to two shifts from three.” According to a Ford spokeswoman, Kelli Felker, both facilities are expected to ramp back up to three shifts the following week.
Feb 2021
GM to Cut Production at Four Plants
General Motors became the latest automaker hit by the global shortage of semiconductor chips as the U.S. automaker said on Wednesday it will take down production next week at four assembly plants. They join the ranks along with VW, Ford, Subaru, Toyota, Nissan, Mazda, and Stellantis.
GM said it will take down production entirely during the week of Feb. 8th at plants in Fairfax, Kan.; Ingersoll, Ont., in Canada; and San Luis Potosi, Mexico. It will also run its Bupyeong 2 plant in South Korea at half capacity that week.
GM did not disclose how much volume it would lose or which supplier was affected by the chip shortage, but said the focus has been on keeping production running at plants building the highest-profit vehicles – full-size pickup trucks and SUVs. Affected vehicles include the Chevrolet Malibu sedan, Cadillac XT4 SUV, Chevy Equinox and Trax, and GMC Terrain SUVs and the Buick Encore small crossover vehicle.
Jan 2021
2021MY Chevy Tahoe Order Cutoff
All 2021MY Chevy Tahoe models, including Police PPV and Special Services, are cut-off immediately for U.S. Fleet and Upfit order types. No further orders will be accepted.
Jan 2021
Ford Recalls Takata Airbag Inflators
Ford Motor Co. will recall 3 million vehicles for Takata airbag inflators that could rupture at a cost of approximately $610 million. NHTSA ordered Ford to issue the recall for driver-side airbag inflators, rejecting the automaker’s 2017 petition to avoid it. The defect, which in rare instances leads to airbag inflators rupturing and sending potentially deadly metal fragments flying, prompted the largest automotive recall in U.S. history of more than 67 million inflators. Worldwide, about 100 million inflators installed by 19 major automakers have been recalled. The recall includes 2.7 million U.S. vehicles and about 300,000 in Canada and other locations.
The Ford vehicles being recalled include various 2006-2012 model-year Ranger, Fusion, Edge, Lincoln Zephyr/MKZ, Mercury Milan and Lincoln MKX vehicles. The vehicles were previously recalled for passenger-side inflators. Takata inflators have resulted in at least 400 injuries and 27 deaths worldwide — including 18 U.S. fatalities with two in previously recalled 2006 Ford Ranger trucks.
Jan 2021
Biden to Order Agencies to Revisit Fuel Efficiency Standards
“President Joe Biden will order U.S. agencies on Wednesday to revisit fuel efficiency standards as well as rules governing emissions from airplanes, and appliance and building energy efficiency standards,” the transition team said.
During the campaign, Biden vowed to “establish ambitious fuel economy standards” and to negotiate them with workers, environmentalists, automakers and states. Automakers have pledged to work with Biden on new rules to reduce emissions. Biden has made boosting electric vehicles a top priority and pledged to spend billions of dollars to add 550,000 charging stations for such vehicles. He also supports new tax credits for purchases of electric vehicles and retrofitting factories for their production.
Jan 2021
Ford Super Duty Order Cutoff
Ford has just announced that Friday, January 22nd will be the last day for Super Duty ordering. Due to varying demand, the fleet final order due date may change with little or no advance notice. Vehicle and options may balance out earlier than anticipated due to high demand and/or commodity shortages.
Jan 2021
2021MY Light Duty & Heavy Duty Truck Fleet Allocation “Fully Subscribed” in Canada
As a result of exceptionally high demand for 2021 Model Year (MY) Light-Duty and Heavy-Duty truck products, GM Canada Fleet is currently “fully subscribed” to their remaining production schedule on LD & HD Trucks (all cab styles). “Fully Subscribed” indicates GM Canada Fleet has more orders in-system than remaining allocation and production and will likely not be able to produce all vehicles currently on order at Event Code 1000. This applies to all cab styles and configurations of Light-Duty & Heavy-Duty trucks, including Regular, Double and Crew Cabs.
With demand continuing to exceed supply as well as a few long-term constraints in place for the Model Year (Free Flow Assist Steps & LPO Floor Liners, for example), new orders for 2021 MY LD & HD truck products will still be accepted but have a high potential to remain at Event Code 1000 and not be released for production as 2021 MY units. These units would be required to be re-ordered as 2022 MY units when ordering becomes available on May 6th, 2021 for HD trucks and May 20th, 2021 for LD trucks. The 2021 MY LD & HD truck order banks will remain open in the short-term to allow customers and dealers to make changes to their existing orders in-system as options become unavailable (“final released”) as the final 2021 MY buildout approaches.
An accepted order does not guarantee the vehicle will be produced. Orders left on the bank could be released for production in the unlikely event that GM receive additional allocation beyond their current production schedule.
Immediate GM Order Cut-Off
The following 2021MY vehicles are cut-off immediately for U.S. Fleet and Upfit order types only. At this time, no further orders can be placed.
IRS Addresses Unintended Personal Use Tax Consequences from COVID-19
The Internal Revenue Service is providing temporary relief for company drivers who are determining the value of company-provided personal use vehicles through the annual lease value (ALV) and who may be experiencing potential tax consequences brought on by the COVID-19 pandemic.
The IRS announced its issuance of Notice 2021-7, which grants companies that allow use of the ALV method to determine personal use value to instead use a vehicle cents-per-mile (CPM) valuation rule starting when COVID-19 was declared a pandemic on March 13, 2020. Personal use of company fleet vehicles is considered a taxable fringe benefit by the IRS that is treated as income. Because the ALV method is common among fleets, the unintended tax consequences could have impacted tens of thousands of employees due to pandemic-related changes in the work environment, according to NAFA representatives.
EMKAY will be reaching out to all participants in the Personal Mileage Program for next steps, appropriate methodology, and calculations.
Industry Recovery to End Pandemic-Wracked Year
General Motors, Toyota Motor Corp., Volkswagen Group, Subaru, Kia and Mazda experienced Q4 U.S. sales increased further signaling recovery for the industry. Ford Motor Co., FCA US, Honda Motor Co. and Nissan Group all posted lower volume in the final quarter of 2020.
U.S. industry sales totaled approximately 4.3 million in Q4, a drop of approximately 2.8%, retail sales were up 2.7%, and fleet sales were down 2%, Ford Motor Co. said Wednesday. Overall, industry sales rose an estimated 5.2% in December. FCA experienced a 8% decline in Q4 reflecting lower fleet shipments, Jeep saw a 4% decline, 5% for RAM, 31% for Dodge, and 58% for Fiat.
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