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Parts shortage forces Ford to cut its 3Q earnings forecast

DEARBORN, MICHIGAN (AP) – A parts shortage that has thousands of Ford’s most-profitable vehicles sitting on lots waiting to be fully assembled has forced the automaker to slash its third-quarter earnings forecast.

Ford said on Monday that it expects to have 40,000 to 45,000 unfinished vehicles on its hands when the quarter ends on September 30. Most of those are SUVs and popular truck models, which are some of Ford’s biggest money makers. The company based in Dearborn, Michigan, now expects its third-quarter earnings before interest and taxes to be between USD1.4 billion and USD1.7 billion. It reported adjusted earnings before interest and taxes of USD3.7 billion in the second quarter.

Its stock fell almost five per cent in after-hours trading on Monday.

The company did, however, say it expected the vehicles that it couldn’t fully assemble in the third quarter to be completed and sold to dealers in the final three months of the year. As a result, it reaffirmed its full-year 2022 profit forecast of USD11.5 billion to USD12.5 billion.

A global shortage of computer chips has hobbled automakers’ ability to fully assemble vehicles and meet high buyer demand. General Motors said in July that shortages of chips and other parts forced it to build 95,000 vehicles without one part or another.

The interior of a 2024 Ford Mustang convertible is shown at the North American International Auto Show in Detroit. PHOTO: AP

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