Ford (F) CEO Jim Farley warned that supply chain and inflation-related challenges will persist for the "foreseeable future" as the auto giant grapples with its latest challenge: a tight labor market.
“It’s not just chips anymore… We have suppliers that have high absenteeism and have been struggling to ship us parts,” Farley told Yahoo Finance (video above). “It feels like Whac-A-Mole. I think we should count on this happening for some time.”
A labor shortage is the latest in a long string of challenges that Ford has faced ever since production was curtailed at the start of the coronavirus pandemic in 2020. Earlier this month, the auto giant warned investors that it expects to incur an additional $1 billion in costs during the current quarter due supply chain disruptions and higher costs.
As a result of those supply disruptions, Ford has delayed deliveries. Up to 45,000 vehicles, described as “largely high-margin trucks and SUVs,” will not ship in the current quarter due to missing parts.
Despite its latest setback, Ford remains optimistic and confident about getting its backlog cleared quickly, telling Yahoo Finance it's mostly a "timing issue." The company expects to deliver those delayed vehicles to dealers before the end of the year and reaffirmed its projection of full-year 2022 adjusted earnings before interest and taxes of between $11.5-$12.5 billion.
“We'll get all that back profitability-wise in the fourth quarter,” Farley said. “We’ve developed a bit of a rhythm around the challenges that we're seeing. We've gotten better and better at dealing with these issues.”
Ford is scheduled to report third-quarter earnings on Oct. 26.
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Seana Smith is an anchor with Yahoo Finance. Follow her on Twitter at @SeanaNSmith.
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