Ford Motor Company On Wednesday, while announcing the latest production cuts in North America at seven assembly plants due to Global chip shortage, That it will provide an update on April 28 of the expected blow to 2021 earnings.
The US automaker said earlier that its operating profit this year will drop by $ 1 billion to $ 2.5 billion. An update to those forecasts will be available when Ford announces first-quarter results on April 28.
A Ford spokeswoman declined to comment on how the outlook has changed, but Wednesday’s actions include closing the Dearborn Track plant in Michigan for two weeks as it builds its best-selling full-size F-150 pickup truck. Ford and other automakers have repeatedly said that they will prioritize producing their higher margin cars.
Ford previously reduced production of the F-150 and in some cases partially manufactured vehicles and discontinued them for final assembly later when there were enough chips on hand.
Industry officials told Reuters this week that the chip shortage will be worse in the second quarter than in the first, and it is unclear whether supplies will recover in the third quarter and whether automakers can make up for all of the lost production later this year.
“We weren’t even close to getting out of the woods yet,” said John Bozella, who heads a major auto dealer group. “It’s unclear how far things will go. Certainly the second quarter is still more challenging than the first, but we have to see how things continue.”
Research firm IHS Markit raised its global production loss estimate on Wednesday.
US rival General Motors said earlier that its 2021 profit could drop by up to $ 2 billion due to a shortage of chips.
Earlier on Wednesday, GM Paul Jacobson CFO, speaking at a Bank of America conference, said he was still comfortable with the company’s 2021 earnings outlook despite the chips shortage. GM said in February it expected to earn $ 4.50 to $ 5.25 a share this year, including hitting the chip.
The chip shortage came with auto factories closed in North America for two months during the COVID-19 pandemic last year and requests for chips canceled, and with high demand from the consumer electronics industry as people worked from home and played video games. This has now left automakers competing for chips.
Semiconductors are widely used in cars, including monitoring engine performance, managing steering or automatic windows, and in sensors used in parking and entertainment systems.
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|F||Ford Motor Company||12.29||-0.18||-1.44%|
|GM||General Motors Corporation||57.44||-1.08||-1.84%|
In addition to closing the Dearborn plant in the weeks of April 5 and April 12, Ford on Wednesday said it will stop working alongside the truck in Kansas City, Missouri, in the week beginning April 5, and will close the Louisville assembly plant in weeks of April 12-19. , The Oakville plant in Canada is discontinued for three weeks, starting on April 12th.
Ford is also reducing overtime shifts at factories in Dearborn, Kansas City, Chicago and Avon Lake, Ohio.
(Co-reporting by Ben Clayman in Detroit; co-reporting by David Sheppardson in Washington, edited by Leslie Adler and Matthew Lewis)
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