It is reported that recently, Jim Farley, the CEO of Ford Motor Company, said in an interview that the company has been continuously facing a shortage of rare earth magnets. This key material is crucial for car production, and the insufficient supply has forced one of its factories to temporarily suspend operations.

Jim Farley said that the supply of the key component, rare earth magnets, mostly comes from China. China has implemented a new approval process for rare earth exports, and this move continues to drag down the operation of the supply chain.

Image source: Ford Motor

Farley admitted frankly, "The company is struggling to keep operating every day now." We have had to suspend some factories and can only barely hold on for now.

It is reported that due to the shortage of rare earth materials, Ford's Explorer SUV production line in Chicago was forced to suspend production for a week last month.

Farley said that he was pleased to note the progress made in the recent US-China trade negotiations, but emphasized that the supply situation of rare earth magnets has not yet seen a substantial improvement.

He said, "The company has submitted applications to the relevant departments in China and is currently reviewing them one by one." We are explaining to the (US) government and the Chinese leadership how important the jobs in the Midwestern United States that rely on the supply of rare earth magnets are. US President Trump said that a new round of negotiations with China recently reached an agreement, and China will promptly approve the export license for rare earths.

At present, rare earth materials have become a hot issue in the trade negotiations between the United States and China. This kind of scarce raw materials is widely used in automobiles, iphones and other products. Automobile manufacturers, especially those focusing on electric vehicles, are among the largest industrial consumers of rare earth materials. The production of core components such as windshield wipers, electric seats, audio systems, and electric vehicle motors all rely on rare earth materials. China is leveraging its dominant position in the global rare earth supply chain to hold significant bargaining chips in negotiations.

China controls over 90% of the world's rare earth processing capacity and implemented new export licensing rules in April, tightening supplies to Western manufacturers and affecting a wide range of products from automobiles, fighter jets to household appliances.

However, it was reported that China had issued temporary export licenses to rare earth suppliers of the three major US automakers, including Ford, earlier this month.

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