Ford to spend $1 billion more than expected on supplier costs

Agence France-Presse

Posted at Sep 20 2022 08:37 AM

A man drives a bus in front of the Ford logo at the Ford India plant located in Chengalpattu, some 50km south of Chennai, India, 13 September 2021. EPA-EFE/IDREES MOHAMMED/FILE
A man drives a bus in front of the Ford logo at the Ford India plant located in Chengalpattu, some 50km south of Chennai, India, 13 September 2021. EPA-EFE/IDREES MOHAMMED/FILE

NEW YORK, United States - Ford said that inflation-related supplier costs during the third quarter will run about $1 billion higher than originally expected.

It also said at the end of the third quarter it expects to have 40,000 to 45,000 vehicles in inventory lacking certain parts because of supply chain issues.

Ford said it expects to deliver those vehicles in the fourth quarter and thus is sticking to its forecast for earnings before interest and taxes, its preferred performance indicator.

Ford shares were down nearly 5 percent on Wall Street in electronic trading after the closing bell.

It said the vehicles that are currently missing parts are mainly high-demand, high-margin models of popular trucks and SUVs.

Like other auto makers, Ford has been grappling since early 2021 with a shortage of computer chips, which are critical to modern vehicles.

General Motors finished the second quarter with nearly 95,000 vehicles that were missing certain parts. Its shares were down 1.5 percent after the warning from Ford.

Ford is scheduled to release definitive third quarter results on October 26.

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