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FCA, Ford idle plants due to semiconductor shortage

DETROIT (Reuters) - Ford and FCA will become the latest automakers to idle production facilities due to a semiconductor shortage. Ford's Louisville Assembly Plant in Kentucky will idle for a week, borrowing a down period from later in the year to compensate. Per Automotive News, FCA is idling its Brampton facility in Ontario, Canada, and one other site which has not yet been identified.  Louisville Assembly is the production site for the Ford Escape and Lincoln Corsair SUVs; Brampton Assembly produces the Chrysler 300, Dodge Charger and Dodge Challenger for FCA.  A Ford spokeswoman, who declined to identify the semiconductor supplier, confirmed the temporary shutdown to Reuters. In this, FCA and Ford join Nissan and potentially Honda in idling production in the wake of the shortage, which also hit Volkswagen late last year. The shortages are being blamed on consumer demand for silicon after production slowdowns resulting from the coronavirus pandemic. Volkswagen said it had to adjust production schedules in China, Europe and North America to compensate.  Nissan said it planned to reduce production of the Note, a hybrid electric car, at its Oppama Plant in Kanagawa prefecture, Japan, but did not give details of the scale of the output cut. The Nikkei newspaper reported that Nissan would slash its Note production at Oppama to about 5,000 units in January, from an initially planned 15,000 units. "A global shortage of semiconductors has affected parts procurement in the auto sector. As a result of this shortage, the Oppama Plant in Japan will adjust production in January, reducing production of the Nissan NOTE," Nissan said in a statement. (This article contains reporting from Reuters.)     Auto News Plants/Manufacturing UAW/Unions Chrysler Dodge Ford

Rising aluminum costs cut into Ford's profit

When Ford reports fourth-quarter results on Wednesday afternoon, it is expected to fret that rising metals costs have cut into profits, even as rivals say they have the problem under control. Aluminum prices have risen 20 percent in the last year and nearly 11 percent since Dec. 11. Steel prices have risen just over 9 percent in the last year. Ford uses more aluminum in its vehicles than its rivals. Aluminum is lighter but far more expensive than steel, closing at $2,229 per tonne on Tuesday. U.S. steel futures closed at $677 per ton (0.91 metric tonnes). Republican U.S. President Donald Trump's administration is weighing whether to impose tariffs on imported steel and aluminum, which could push prices even higher. Ford gave a disappointing earnings estimate for 2017 and 2018 last week, saying the higher costs for steel, aluminum and other metals, as well as currency volatility, could cost the company $1.6 billion in 2018. Ford shares took a dive after the announcement. Ford Chief Financial Officer Bob Shanks told analysts at a conference in Detroit last week that while the company benefited from low commodity prices in 2016, rising steel prices were now the main cause of higher costs, followed by aluminum. Shanks said the automaker at times relies on foreign currencies as a "natural hedge" for some commodities but those are now going in the opposite direction, so they are not working. A Ford spokesman added that the automaker also uses a mix of contracts, hedges and indexed buying. Industry analysts point to the spike in aluminum versus steel prices as a plausible reason for Ford's problems, especially since it uses far more of the expensive metal than other major automakers. "When you look at Ford in the context of the other automakers, aluminum drives a lot of their volume and I think that is the cause" of their rising costs, said Jeff Schuster, senior vice president of forecasting at auto consultancy LMC Automotive. Other major automakers say rising commodity costs are not much of a problem. At last week's Detroit auto show, Fiat Chrysler Automobiles NV's Chief Executive Officer Sergio Marchionne reiterated its earnings guidance for 2018 and held forth on a number of topics, but did not mention metals prices. General Motors Co gave a well-received profit outlook last week and did not mention the subject. "We view changes in raw material costs as something that is manageable," a GM spokesman said in an email.

New autonomous testing ground in Michigan will help battle bad weather

If one of the big weaknesses of autonomous vehicles is their ability to navigate in the snow, consider this a trial by fire. The American Center for Mobility says it has opened its $110 million driverless car testing facility on the site of a former General Motors assembly plant in Michigan, with Toyota and auto supplier Visteon the first to begin testing this week. The ACM proving ground is a 500-acre site at historic Willow Run in Ypsilanti Township, near Ann Arbor. It's one of 10 sites designated by the U.S. Department of Transportation as pilot proving ground sites to test AV technologies. It features a variety of simulated environments to test driverless cars, including a 2.5-mile highway loop, two double overpasses, intersections, roundabouts and a 700-foot curved tunnel. It also opens just as the region experiences a series of snowstorms and the first frigid temperatures of the season. That ability to test autonomous vehicles in a wide variety of weather conditions is important, as autonomous vehicle sensors have struggled to handle cold, wet and snowy conditions. Google parent Alphabet in October said its Waymo division was expanding its winter testing operations to Michigan, making it the sixth state where it's testing its driverless car systems. In a Medium blog post, Waymo CEO John Krafcik wrote that "This type of testing will give us the opportunity to assess the way our sensors perform in wet, cold conditions. And it will also build on the advanced driving skills we've developed over the last eight years by teaching our cars how to handle things like skidding on icy, unplowed roads." Waymo also opened a development center in suburban Detroit in 2016, working with Fiat Chrysler to integrate its autonomous technology into Chrysler Pacifica hybrid minivans. Visteon began testing and validating its DriveCore autonomous driving platform to evaluate algorithms, vehicle-to-vehicle and vehicle-to-infrastructure technology and other systems. Toyota used the facility Wednesday to begin orientation and driver training. ACM has so far secured $110 million to construct the first two phases from founders Ford, Hyundai America Technical Center, Toyota and Visteon, and says it expects to announce more investment soon.