Ford considering shipping incomplete F-150s to dealers
Images of thousands of brand new, 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 especially terrible; CEO Jim Farley said nine of Ford's Tier 1 suppliers relied on chips from a single chip maker who experienced a fire in their cleanroom. This break in the supply chain breaks the knees of the star Ford player. Earlier this month, the Detroit Free Press reported that the automaker had procured a shipment of chips that would enable it to deliver 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. Any dealer who receives such vehicles will receive training for the service personnel to install the hardware and a refund for almost one hour of work for each repair. This is just an idea for now, and when it becomes a reality, only dealers who agree to the plan would receive unfinished trucks.
Many important questions must be answered satisfactorily before they can leave the whiteboard. Dealers won't want an obligation to pay and insure trucks on their lots that they can't sell and, more importantly, don't know when to sell. The profit-and-loss people hate such scenarios. Some dealers are also cautious about taking responsibility for such repairs. Chips that are important enough to make a truck unsaleable when those chips are missing will control important and perhaps numerous systems. Should something go wrong in the future, customers and their lawyers will examine all possible connections to chips installed by the dealer.
Ford F-Series sales were down only 1.5% from 2020 through the end of June. However, June sales of the F-150 were down 26.9% from 2020, and those numbers refer to the pandemic year. Given the current astronomical demand in the new car market, Ford is highly motivated to spit with dealers until they come to a mutually beneficial agreement to minimize the delay between truck completion and sale. And it's sure Ford is fed up with paying places like Kentucky Speedway to park flocks of its golden geese. A Ford spokesman just told Automotive News, "We are looking at a number of different options as we work to get our customers and dealerships their new vehicles as soon as possible."
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