Term should be Bailout not Bailment, of course Ford will ask dealer to floor plan. From Auto News:
Newly manufactured Ford F-150 pickup trucks are seen waiting for missing parts in Dearborn, Michigan
Newly manufactured Ford F-150 pickup trucks are seen waiting for missing parts in Dearborn, Mich.
Apple Ford-Lincoln normally stocks about 700 vehicles on its lot. Last week, it had fewer than 150.
Chip Doetsch, president of the dealership in Columbia, Md., is desperate for any additional vehicles he can get — even if they're not quite finished yet.
"It's easier to sell things you can see," he told Automotive News. "It's not the most enjoyable thing to have a customer walk in and say they want to buy something and you don't have something to sell them."
With few signs that the microchip shortage plaguing the auto industry will abate anytime soon, Ford Motor Co. is considering the unusual step of shipping partially built vehicles to dealerships and relying on service technicians to add the missing chips when they arrive.
The automaker is trying to ease the glut of F-Series and other vehicles that have languished on storage lots surrounding its assembly plants for months by instead stashing them with retailers who have ample space as their inventory of new vehicles has dried up.
"I think it's indicative of them thinking through a problem in a novel way," said Doetsch, who said he was familiar with the plans but had not yet signed any agreement to accept unfinished vehicles. Taking them isn't mandatory, Ford has told dealers, and technicians at the stores that do will receive training and compensation from the factory for the extra work.
The latest numbers on the microchip shortage: Another N.A. spike
The new strategy comes as General Motors and Stellantis add downtime at their assembly plants because of the shortage, which AutoForecast Solutions last week estimated could cost the industry 6.3 million vehicles globally, including nearly 2 million in North America.
Until now, Ford, GM and other automakers have been building some vehicles without chips and parking them nearby.
GM, which last week finished shipping 30,000 midsize pickups that had been awaiting components, also has eliminated some features from certain models, including wireless phone charging and automatic stop-start.
According to people with knowledge of Ford's planning, the new strategy would give the automaker more storage space so it could keep plants running and avoid additional downtime, and it would speed the rate at which the vehicles could reach customers' hands once completed, instead of having to ship them en masse later.
"I think it's more of an efficiency play if anything, for both the dealer and manufacturer," Doetsch said. "If you ship it to us, you're shipping it once, instead of moving it three or four times to complete the job."
Many details are still being worked out, including whether dealers would be responsible for the vehicles before they're in salable condition.
Dealers are not expected to have to floorplan the vehicles before they're finished, one person with knowledge of the plans told Automotive News.
Ford has not made a final decision on the plan, but it has had informal calls with many dealers and is asking them to opt in to what it's calling a "vehicle bailment agreement," according to people familiar with the situation.
Ford, in a statement, said it was "exploring a number of different options as we work to get our customers and dealers their new vehicles as quickly as possible."
It's unclear what kinds of vehicles Ford would send to retailers. One dealer told Automotive News that Ford was planning to send unfinished Ranger midsize pickups so it wouldn't compromise Bronco SUV production at the same plant, while another expects to get F-Series pickups that have been parked at the Kentucky Speedway.
Doetsch, who said he was not aware of what vehicles might be part of the plan, surmised that it would depend on the complexity of the installation process, which could vary by model.
"If you have to take out a dash, for example, that's a five-hour job and a different proposition than less than an hour of time for a technician to pop [a chip] in," he said.
Some dealers who spoke with Automotive News said they're concerned about shifting the responsibility — and potential liability — from the factory to dealers. Others, however, applauded the move because it gives them something to put on their nearly empty lots.
Ford has been hit harder than other automakers by the chip crisis, saying that the shortage will cost it $2.5 billion and slash its production this year by 1.1 million vehicles. Many customers have been forced to wait months for delivery.
The company has attempted to ease the crisis by focusing on custom-built orders and offering buyers $1,000 off if they place an order that will be fulfilled at a later date.