the supply. And Ford is his first victim

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The breakdown of the supply chain and the increase in the prices of raw materials is subduing ford at very high pressure. Yesterday, Tuesday, September 20, his shares fell more than 12% in the biggest drop in the last 11 years. In full conversion to the electric car, Ford has a real problem.


The investor movement It came after a major announcement from the company: inflation will raise manufacturing costs by $1 billion. A fact that has its direct consequence in the final results of the company. According to the company itself, they will earn between 1.4 and 1.7 billion dollars before taxes in the third quarter of the year, a figure that, however, is far from the 3.7 billion dollars expected and the 3 billion reached last year.

In addition to the higher costs derived from inflation, Ford has been fighting for some time as best it can with the supply chain. In fact, they have announced that they have a volume of between 40,000 and 45,000 “high-margin SUVs and trucks” that are unfinished, in the company’s words, and that they hope to be able to market before the end of the year.

Ford’s situation is summed up well with an image collected in The Drive. The firm is stockpiling trucks at Kentucky Speedway, a circuit that is being invaded by the accumulated stock that the firm has left unfinished due to lack of parts. The aerial image and its comparison between August and September is illuminating.

Not only in the United States are they checking the problems that the company has to deliver cars. In summer, Ford closes orders for its Fiesta and Focus in Europe, two of its star models. At these times, the configurator it allows to select some versions of the Focus (the most powerful or the familiar ones are not shown) and it is not possible to configure a Ford Fiesta or a Ford S-Max. Of the minivan, in fact, no stock availablewhile the utility only has 14 units offered.

a turning point

This break in the supply chain and the constant rise in inflation puts a company that had already made the difficult decision of splitting in two to guarantee its future on the ropes. Electric vehicles and software development will be covered under the brand Ford Model efinanced in part by the combustion division.

The company has also released two unpromising messages. The last one warns that they will have to make their models more expensive, a trend that, at least in Europe, is already a reality and affects more firms every day.

The second message is aimed directly at your workers. The employees, who are already worried about the lack of supplies (Almussafes is verifying how the ERTES repeat themselves repeatedly) and Jim Farley, CEO of the firm, has assured that “they have too many people working“.

We return to the times of the Ford T. The brands bet on the "preset cars" to solve supply problems

The words, collected by Bloomberg in July, referred to a question from Adam Jones, an analyst at Morgan Stanley, to whom he confirmed that they need to cut 8,000 jobs, especially in the Ford Blue division, the one dedicated to combustion engines.

Already last August, the company reconfirmed that will lay off 3,000 employeesdistributed mostly in plants in the United States, Canada and India dedicated to the manufacture and development of combustion models to focus on electric cars, cheaper and easier to produce.

A situation that the well-known American economist Peter Schiff analyzes with even worse eyes. In fact, he points out that the process that Ford is going through could lead to bankruptcy if the US Federal Reserve does not intervene along the way.

Jim Farley himself has described this situation as the company’s most important moment, since it has to reconvert a business model with which they have been working for “more than 100 years”. Along the way, expect to invest 50,000 million dollars until 2026 only for electric car.

With Europe pressing to move the mobile fleet to pure electric and after the division of the company, Ford needs its electric vehicles to take off definitively. The problem is that his successful Ford Mustang Mach E has also been consumed by high manufacturing costs and is no longer profitable.

The objective is that all the investment made until 2026 results in the manufacture of two million electric vehicles per year. This same date is the one that Bloomberg analysts They point to a turning point for the electricity division to be profitable. Along the way, the supply chain and high inflation is seriously complicating the roadmap.

The breakdown of the supply chain and the increase in the prices of raw materials is subduing ford at very…

The breakdown of the supply chain and the increase in the prices of raw materials is subduing ford at very…

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