Ford, one of Detroit’s largest automakers, has been forced to shut down some factories due to a severe shortage of rare-earth magnets. The company’s CEO, Jim Farley, described the situation as “hand-to-mouth right now.” The magnets, critical components in modern cars’ brake pads, seats, windshield wipers, and batteries, are not being supplied by China after President Trump imposed tariffs on Chinese imports.
The shortage threatened to strangle production plants and empty car dealership lots. Ford’s Chicago plant, which builds the Explorer SUV, was among those affected, with workers told to go home due to the magnet shortage. However, American and Chinese trade negotiators have announced a tentative agreement that lowers tariff rates and resumes magnet exports.
As part of the deal, temporary export licenses will allow magnet shipments to resume to top three US automakers, including Ford, as soon as this month. Industry analysts confirmed that rare-earth magnets will likely be exempt from American tariffs under the new deal.
Ford produces over 80% of its SUVs and trucks for the US market in American plants. The company’s struggles highlight China’s current leverage over American manufacturing, as the country now controls more than 90% of global rare-earth processing capacity.
Source: https://www.dailymail.co.uk/yourmoney/cars/article-14810817/ford-forced-shutter-factories-parts-shortage.html