Home & Leisure

Ford posts $3.1 billion loss for Q1 but signals supply-chain improvements ahead

Jordyn Grzelewski, The Detroit News on

Published in Automotive News

Supply-chain woes

Underscoring the supply-chain issues that held back production in the first quarter, Ford's U.S. sales were down 17.1% to 432,133 vehicles, according to data from Inc.

The automaker said that the chip shortage constrained production and shipments in January and February, but that it saw improvements in March. And more profitable products in North America — where Ford reported EBIT of nearly $1.6 billion — like the F-Series truck line took a disproportionate hit, executives said. In all, the automaker said it has some 53,000 assembled vehicles awaiting components containing semiconductor chips.

"Demand for our products last quarter exceeded our ability to produce them — and obviously, the big reason for that was the global shortage of semiconductors," Chief Financial Officer John Lawler told reporters Wednesday. "We didn't have enough chips to build the vehicles customers wanted and couldn't take full advantage of our manufacturing capacity."

The company, he said, is doing everything it can to break production constraints and meet demand.

Underscoring the demand situation the company is in: Lawler said Ford's existing customer orders at the start of the second quarter was equivalent to roughly $17 billion in revenue. And the company had nearly 400,000 customer orders at the end of the quarter.


Continued high demand throughout the myriad supply-chain disruptions the global auto industry has endured over the last two years has pushed up prices. Ford's average transaction price in the U.S. was $49,343, up 3.1% year-over-year, according to Edmunds.

Lawler said strong pricing has helped the company mostly offset the inflationary pressures it's seen to date, but the company estimates commodity costs will be up about $4 billion year-over-year this year.


Lawler also acknowledged the company has seen "considerable" inflationary pressures on the raw materials needed to make EV batteries, such as lithium and nickel — and executives said raw material supplies will be a crucial issue as Ford goes further down the electrification path.


swipe to next page
©2022 Visit at Distributed by Tribune Content Agency, LLC.


blog comments powered by Disqus