Ford Motor Company says it is facing an extra $1 billion in supplier costs in the third quarter, echoing the problem faced by other automakers who continue to struggle with rising inflation and long-lasting supply chain issues. Shares fell 5.49% in after-hours trading following the announcement.
Ford says supply shortages have caused a backlog of between 40,000 and 45,000 unfinished vehicles, which are assembled but incomplete as they await needed parts. The vehicles are primarily high-margin trucks and SUVs and will likely remain in the company’s inventory through the end of Q3.
Other automakers have had problems stemming from inflation and supply chain shortages. In August, Rivian said it expects to lose $5.45 billion this year, an increase from earlier estimates of $4.75 billion, due to “supply chain challenges” and “raw material inflation.”
In July, General Motors reported a second-quarter net income of $1.69 billion, a 40% reduction from the same period last year. The company said supply chain disruptions and semiconductor chip shortages are causing bottlenecks at its factories.
Despite the higher supplier costs, Ford maintains its projected 2022 adjusted earnings before interest and taxes guidance of between $11.5 billion and $12.5 billion. However, the company did change its third-quarter projections to between $1.4 billion and $1.7 billion. Third-quarter earnings are expected to be announced by October 26.
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