Ford forced to shutter factories amid worrying parts shortages: 'Hand-to-mouth right now'
China's trade leverage temporarily shuttered one of Detroit's biggest brands.
Ford's CEO, Jim Farley, said his company doesn't have enough rare-earth magnets, forcing the automaker to halt some production lines.
'It's day to day,' the top boss said in a Friday interview with Bloomberg News. 'We have had to shut down factories. It's hand-to-mouth right now.'
Ford's production struggles are part of the ongoing tit-for-tat trade escalation between Washington and Beijing. But the company is expecting relief in the coming weeks.
In April, Chinese officials stopped the flow of magnets into the US — a critical component found in nearly every modern car's brake pads, seats, windshield wipers, and batteries.
The pause came in response to President Donald Trump's then-145 percent tariffs on all Chinese imports.
The throttled magnet trade threatened to strangle production plants and empty car dealership lots, sending automakers and industry groups into a tizzy.
In May, the Alliance for Automotive Innovation — which represents major US automakers — sent a letter to President Trump warning that China's response could paralyze car production.
'Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components,' the letter, signed by the group's president, John Bozzella, said.
'In severe cases, this could include the need for reduced production volumes or even a shutdown of vehicle assembly lines.'
Later that month, workers at Ford's Chicago plant, where the company builds the popular Explorer SUV, were told to go home due to the magnet shortage.
But as Ford continues to scramble for parts, the company is now expecting a reopening of the supply spigot.
American and Chinese trade negotiators have announced a tentative agreement that lowers tariff rates and resumes magnet exports.
The deal includes temporary export licenses for rare-earth suppliers. Those licenses will allow magnet shipments to resume to the top three US automakers — including Ford — as soon as this month.
China's President Xi Jinping has not officially signed the deal, but President Trump posted on Truth Social that the agreement was 'done.'
Industry analysts confirmed to DailyMail.com that rare-earth magnets will likely be exempt from American tariffs under the new deal.
A standard gas-powered vehicle requires around a half-pound of rare earth magnets
CEO Jim Farley confirmed that Ford had temporarily shuttered some of its plants because of China's magnet pause
Ford produces over 80 percent of its SUVs and trucks for the US market in American plants
Still, as the pipeline starts back up, Farley's announcement underscores China's current leverage over American manufacturing.
The US once refined its own rare-earth magnets for vehicle assembly, with facilities operating across dozens of Midwestern states.
But 20 years ago, the last domestic refinement plant — located in Indiana — shut down.
China, which now controls more than 90 percent of global rare-earth processing capacity, filled the gap.
American automakers are now looking elsewhere for supply, including Australia, Canada, and Saudi Arabia.
'Should the US-China trade deal be upheld by both sides, US automakers should be able to secure enough rare earths to continue their production as scheduled,' Seth Goldstein, a vehicle analyst at Morningstar, told DailyMail.com.
'I would guess all US automakers are looking to secure alternate rare earths supply outside of China as a way to protect themselves from the potential that China may halt exports again in the future.'
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