Ford Expects Production Interruption Due To Parts Supply Shortage

Ford Motor Company (NYSE: F) is anticipating a high number of its vehicles being built to not immediately leave the warehouse as shortages in the supply chain leave the company waiting for parts.

The company announced on Monday that it estimates around “40,000 to 45,000 of [vehicles], largely high-margin trucks and SUVs,” will be stalled at the production facility for the third quarter. This will cost the firm about US$1.0 billion higher in supplier costs, spurred further by the effects of inflation.

As the automaker expects this backlog to be sold in the fourth quarter instead, it has adjusted its third quarter EBIT guidance to US$1.4 billion – US$1.7 billion.

However, it reiterates its full-year 2022 EBIT guidance of US$11.5 billion – US$12.5 billion.

Inflation and potential recession have been a looming threat for the American manufacturer, having to announce a 3,000-job cut back in August 2022. Adding to the company’s conundrum is the US$1.7 billion payment in punitive damages after a court in Georgia ruled against the pickup truck maker in a fatal 2014 rollover accident.

Ford Motor Company last traded US$13.70 on the NYSE

Information for this briefing was found via Ford. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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