By on July 10, 2020

Ford cautioned that some of its American assembly plants could be put on ice as early as next week, as shortages persist at a Mexican plant still not running at full capacity.

The potential engine shortages stemming from coronavirus fears at Ford’s Chihuahua Engine Plant and in the surrounding countryside would stymie production of key Ford products, including the new-for-2020 Super Duty line.

First reported by Reuters, U.S. Ambassador to Mexico Christopher Landau (a great name) said Thursday that Ford execs told him the possibility of U.S. plant shutdowns next week was very real. In Mexico’s Chihuahua state, industrial capacity has been limited to 50 percent on the order of the governor.

Chihuahua Engine builds, among other mills, the 2.0-liter and 2.5-liter four-cylinders found in the Escape crossover. It also assembles the 6.7-liter turbodiesel V8s found under the hoods of many Super Duty pickups. Anything that would stem the flow of big-margin trucks to American consumers would be a huge blow to any automaker, especially as companies attempt to replenish depleted inventories in the wake of the damaging COVID-19 production shutdown.

The threat isn’t just idle talk on the part of an excitable ambassador, either.

“Due to COVID-19, the State of Chihuahua in Mexico has limited employee attendance to 50 percent, a region in which we have several suppliers,” said Kumar Galhotra, president of Ford’s Americas and International Markets Group, in a statement reported by The Detroit News.

“With our U.S. plants running at 100 percent, that is not sustainable. While we do not expect any impact to production next week, we are continuing to work with government officials on ways to safely and constructively resume remaining production.”

[Image: Ford]

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12 Comments on “Ford’s Mexican Engine Pipeline Running at Half Speed; Automaker Warns of Plant Shutdowns...”

  • avatar

    “Ford’s Chihuahua Engine Plant and in the surrounding countryside would stymie production of key Ford products”

    What do you expect? They can’t work very fast with those tiny little paws. C’mon Ford, spend a little extra money on the food and upgrade to a golden retriever or lab.

  • avatar

    Is the Louisville plant really not nimble enough to switch to 100% gas engine production in the Super Duties for the time being? This shortage hardly seems like something that would have popped up out of the blue ie it could have been planned for weeks ago.

    • 0 avatar

      Jack I think it’s a matter of take rate and production rates on the gas engine. The supply base for any given part or class of parts is typically only prepared to “flex” their production rate up to 20% higher on any given product. Engines, being a very complex assembly comprised of many components sourced from all over the world, would be subject to this constraint on two levels: Engine assembly itself and the supply of all the parts necessary to assemble them. On top of this, the take rate on gas trucks probably wouldn’t support a few weeks of gas-only trucks being pushed out to dealer lots, causing excess inventory.

      • 0 avatar

        I was basing my idea on the “quasi-automotive” manufacturing facility I work at, where we can typically work around temporary supply shortages by running a larger batch than normal of one type of product, followed by a large batch of the other product such that at the end of a month or whatever we would have built the same product mix we always were going to.

        Based on my experience factory ordering a truck from Lousiville, there’s plenty of slack time between dealer order, order receipt, planning, scheduling, building, storage on-site, and shipping that I’d think some inventory balancing would be possible assuming the Mexican plant gets back on line soon-ish. Even if not, wouldn’t a dealer rather have 2 gas trucks and no diesel than 1 gas truck and no diesel?

        Perhaps your first reason is the actual one. If they physically can’t get enough gas engines in then that would make sense. I’m sure someone smarter than me has thought it all out.

    • 0 avatar

      I’m sure that they could send only gas models down the line but presumably using the gas engines at a faster rate will eventually outstrip production at that plant.

      Then there are the orders, of those on the books only so many of them are for gas trucks and presumably at some point you’ll outstrip orders for gas trucks.

      I expect most dealers would not be happy if a truck they ordered with a diesel engine showed up as a gasser, nor would a customer who ordered a truck.

      However I’m sure that Ford has shared this with their dealers and told them if they order a diesel truck the wait will be longer than normal while the gas trucks will be available as usual or even sooner.

  • avatar
    schmitt trigger

    I can bet you a cheeseburger and large fries, that president Trump admonished president Lopez Obrador on this very subject, on his White House visit that has just concluded.

  • avatar

    That’s one way of looking at it.

    From Ford’s perspective, that’s sales of $75,000 diesel engines on average. The truck is thrown in for free.

    Those that normally buy a diesel in that class, especially above a 1-ton (class 3), it’s not an either/or proposition, how ever awesome the 7.3 Godzilla may be.

  • avatar

    Is the 2.5 you referenced the hybrid for the Escape? I thought the only engines available for the Escape this year were the turbo triple and the turbo quad.

    • 0 avatar

      Presumably it is the Hybrid power plant I don’t think they use the NA 2.5 anywhere else anymore. The Hybrid has been available since the current Escape launched, it is the Plug In Hybrid unit that will be a 2021.

  • avatar

    This issue just reinforces the wisdom that the proud American automaker Ford has demonstrated by keeping all of their manufacturing within the U.S. of A.

    Do that and you won’t have the kind of issues described here.

    [My impressions are drawn from the advertising Ford has been bombarding me with during the pandemic. If my impressions are incorrect in any way, please feel free to correct them.]

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