Ford Motor Company said on Wednesday that although it announced the latest production cuts at seven assembly plants in North America due to global chip shortages, Ford Motor Company will update its expected impact on 2021 profits on April 28.
The American automaker has previously stated that its operating profit this year will decrease by US$1 billion to US$2.5 billion. Ford will provide an update to the forecast when it reports its first quarter results on April 28.
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A Ford spokesperson declined to comment further on how the forecast will change, but Wednesday’s action included the suspension of Ford’s Dearborn truck plant in Michigan for two weeks, where it will produce its best-selling F-1
Ford has previously cut the production of the F-150, and in some cases partially manufactured and parked the vehicle so that it can be assembled after it has enough chips.
Industry officials told Reuters this week that the chip shortage in the second quarter will be more serious than in the first quarter. It is unclear whether supplies will resume in the third quarter and whether automakers can make up for all losses later this year.
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John Bozzella, the person in charge of a large automobile trading group, said: “We are not out of the predicament.” He said: “There is still room for further progress. The second quarter is definitely more challenging than the first quarter, but We must see how the situation continues to develop.”
Research firm IHS Markit raised its estimate of the decline in global production on Wednesday.
American rival General Motors has previously stated that its 2021 profit may be cut by US$2 billion due to a shortage of chips.
General Motors Chief Financial Officer Paul Jacobson said at a Bank of America meeting earlier on Wednesday that he was still satisfied with the company’s 2021 profit forecast despite the shortage of chips. General Motors said in February that, including chip prices, the company expects to earn US$4.50 to US$5.25 per share this year.
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The chip shortage is due to the two-month closure of North American auto factories during the COVID-19 pandemic last year, the cancellation of chip orders, and the surge in demand in the consumer electronics industry caused by people working at home and playing video games. Now, automakers are vying for chips.
Semiconductors are widely used in automobiles, including monitoring engine performance, managing steering windows or automatic windows, and sensors used in parking and entertainment systems.
|F||Ford Motor Company Limited||12.29||-0.18||-1.44%|
|General Motors||General Motors Corporation||57.44||-1.08||-1.84%|
In addition to closing the Dearborn plant in the weeks of April 5th and April 12th, Ford said on Wednesday that it will be idle on the truck side of Kansas City, Missouri during the week of April 5th, and during the week of April 5th. Closed its Louisville assembly plant. Starting from April 12, it will be idle for three weeks at the Oakville plant in Canada.
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Ford also cut overtime hours at plants in Dearborn, Kansas City, Chicago and Lake Avon, Ohio.
(Ben Klayman’s report in Detroit, David Shepardson’s other reports in Washington, Leslie Adler and Matthew Lewis Lewis) edit