Ford forced to idle multiple US plants on China rare earth magnet shortage

Rare earths have become a flashpoint in US-China trade talks, with China using its dominance in these key materials-vital to cars, iPhones and more-as leverage in negotiations

By Keith Naughton

 

Ford Motor Co. temporarily idled factories in the US over the last three weeks due to a shortage of magnets containing rare earth minerals, key components embroiled in US trade tensions with China.  

Chief Executive Officer Jim Farley said the situation demonstrates the need to develop a domestic supply chain for critical auto components. China has instituted a new approval process for exports of rare earths that has slowed supply lines. 

 

“We cannot get any high powered magnets without China,” Farley said Friday at the Aspen Ideas Festival. “We shut down plants for the last three weeks because we cannot get high powered magnets.” 

 

Farley said those magnets are critical to seats, windshield wipers, doors and audio systems. “We can’t make that stuff,” he said of the magnets.

 

Farley has been outspoken about the company’s struggles obtaining the materials, even after US President Donald Trump earlier this month said negotiations with China yielded an agreement for Beijing to swiftly approve export licenses for rare earths.

 

Rare earths 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.