Ford Sees Shortages Extending Into '23 at Reduced 'Scope and Severity'
Ford’s Q4 financial metrics will be lower than “previously assumed in the back half of the quarter, and that's the result of chip constraints,” said Chief Financial Officer John Lawler on a Q3 earnings call Thursday. “We do expect free…
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cash flow to increase with higher production, and the associated improvement in supplier payables.” Ford for 2022 “is likely to experience some industry crosswinds that could drive a range of outcomes,” he said. Vehicle production is expected to fall “significantly below our capacity” next year due to the chip shortage, said Lawler. “It's difficult to predict the interplay between semiconductor-related constraints, volume and pricing, and this will continue to remain dynamic.” Ford also will likely encounter many “inflationary costs” for raw materials and freight in 2022, he said, “but it's too early to size that right now.” Based on Ford's "current assessment," it predicts vehicle production will rise about 10% in 2022, "but that number is very dynamic and changes almost weekly," said Lawler. "We're doing everything we can to get our hands on as many chips as we can." The chip shortage "could extend into 2023," though at reduced "scope and severity," he said.