Ford Motor on Saturday confirmed reports that it would be rolling back production at some of its plants beginning this week, but the news wasn’t weighing on the stock Monday morning.
Ford (ticker: F) stock was up about 0.3% in early trading. The S&P 500 had risen 0.2% and the Dow Jones Industrial Average slipped 0.1%.
Reuters reported Saturday that Ford (ticker: F) plans to suspend or cut production at eight of its factories in the United States, Mexico and Canada because of semiconductor supply constraints. Reuters cited a spokeswoman at the auto maker.
The changes were due to take place beginning Monday, Ford told Reuters.
In an emailed statement to Barron’s, a Ford spokesman said there would be “shutdowns in some locations next week.”
“Of course, the latest in a year-plus series across the industry. Informed the Q1 volume guidance we gave on Thursday. Affected colleagues were alerted in local communications over the past few days,” the Ford spokesman wrote in an email.
The Monday stock move following the weekend report likely isn’t negative because investors already know the chip supply issue isn’t fully resolved. Both General Motor (GM) and Ford gave financial guidance for 2022, when reporting fourth quarter numbers last week, that implied most of the production improvement forecasted will come in the second half of the year.
Ford shares fell 9.7% on the report. GM stock dropped 1% after its fourth quarter report.
Globally, about 18 million light vehicles were produced in the fourth quarter of 2021. That’s about three or four million cars less that the market demanded. Companies couldn’t produce all the cars they could have sold. Production rates are expect to improve gradually, rising to roughly 20 million or 21 million a quarter in the first half of 2022.
Chips shouldn’t be an issue forever. Ford CEO Jim Farley recently told Barron’s that chip issues eventually will resolve themselves, partly as the global economy returns to normal and partly because the company is working to make its supply chain more resilient by adding more engineering and redesign capabilities.
Reuters reported production at factories in Michigan, Chicago and in Cuautitlan, Mexico, would be suspended beginning on Monday. A single shift or a reduced schedule was planned for the company’s factories in Dearborn, Michigan, and Louisville.
In Kansas City, production of Ford’s F-150 pickup trucks will be idled while one shift will run for production of its Transit vans, according to Reuters.
CNBC also reported that Ford would be cutting production because of parts shortages. The automaker told CNBC there would be downtime this week for the Ford Bronco and Explorer SUVs; the Ford F-150 and Ranger pickups; the Ford Mustang Mach-E electric crossover; and the Lincoln Aviator SUV at plants in Michigan, Illinois, Missouri and Mexico.
Write to Joe Woelfel at [email protected]
