Ford Motor Co. Continues to struggle to obtain rare earth magnet supplies that are essential to car production and have already forced a temporary shutdown of one of its factories.
The supply of the critical components has been trickling out of China, which has instituted a new approval process for exports of rare earths that continues to slow supply lines, Ford Chief Executive Officer Jim Farley said.
“It’s day to day,” Farley said in an interview Friday with Bloomberg TV. “We have had to shut down factories. It’s hand-to-mouth right now.”
Ford idled its Explorer sport utility vehicle factory in Chicago for a week last month due to a shortage of rare earth materials.
Farley said he is pleased with the progress he read about from trade talks between the US and China recently, but he has yet to see an improvement in the flow of magnets. Those are used throughout vehicles to power components such as windshield wipers, seats and audio systems.
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We have applications into Mofcom and they are being approved one at a time,” Farley said, referring to China’s ministry of commerce. US President Donald Trump said that fresh negotiations with China this week yielded an agreement for Beijing to swiftly approve export licenses for rare earths.
The materials have emerged as a hot-button issue in US-China trade talks. The coveted raw materials are deeply embedded in cars, iPhones and other products and China has used its dominance to exert leverage in the negotiations.
“We’re educating the administration, we’re educating the Chinese leadership about how important these jobs in the Midwest are that are dependent” on the supply of rare earth magnets, Farley said.