Ford expects additional $1B in inflation-related supply chain costs
GM, other automakers also feeling pain from inflation, supply chain issues
Ford CEO Jim Farely explains what drove the automaker's investment in ICE vehicles
FOX Business correspondent Grady Trimble speaks to Ford CEO Jim Farley about the evolution of the company's electric vehicle and ICE businesses.
Ford Motor Co. warned investors that it expects to incur an additional $1 billion in costs in the third quarter related to inflation and supply chain challenges.
"The supply shortages will result in a higher-than-planned number of ‘vehicles on wheels’ built but remaining in Ford’s inventory awaiting needed parts, at the end of the third quarter," the automaker said on Monday. "The company believes that those vehicles – an anticipated 40,000 to 45,000 of them, largely high-margin trucks and SUVs – will be completed and sold to dealers during the fourth quarter."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| F | FORD MOTOR CO. | 10.36 | +0.14 | +1.37% |
Despite limits on the availability of certain parts and higher supplier payments to account for the effects of inflation, Ford has affirmed its full-year 2022 adjusted earnings before interest and taxes (EBIT) guidance of between $11.5 billion to $12.5 billion. Ford now anticipates third-quarter adjusted EBIT to be in the range of $1.4 billion and $1.7 billion.
GENERAL MOTORS AND KROGER LAUNCHING ELECTRIC GROCERY CART
Ford
The company will provide "more dimension about expectations for full-year performance" during the release of its third-quarter financial results on Oct. 26.
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Ford isn't the only automaker feeling the pain from inflation and supply chain issues.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GM | GENERAL MOTORS CO. | 51.80 | +0.84 | +1.65% |
General Motors said in July that it had approximately 95,000 vehicles in its inventory that were manufactured without certain components. At the time, GM said that "substantially all of these vehicles will be completed and sold to dealers before the end of 2022."
In addition, the company maintained its full-year guidance for fiscal year 2022.