ford CEO Jim Farley said on CNBC on Wednesday that he expects the business impact of chip scarcity to worsen before it improves, but the automaker will be poised for a strong 2022.
“The second quarter will be the lowest point for us,” he told Jim Cramer in a “Mad Money” interview. “We think this quarter will be our most difficult.”
Farley, who has headed the Dearborn, Michigan-based company since October, expects the landscape to brighten up later this year.
“We expect our production to recover in the second half,” he said, adding that 2022 “will be an incredible year for us.”
The comments come to Ford reported numbers from the first quarter at the end of the trading day. The company beat Wall Street’s estimates on its income statement.
Ford expects the global shortage of semiconductors. that have hit the manufacturing sector in various sectorsto have an effect of roughly $ 2.5 billion on the fiscal year. The parts problem hit about 17%, or 200,000 units, in the first quarter, Farley said. In a press release, Ford estimates that around 1.1 million production units will be lost this year due to the shortage.
“In the first quarter, we made up for all of these production cuts in terms of incremental pricing and cost control, and not mortgaged the future to do that. We actually accelerated spending on electric vehicles,” he said.
Farley said the shortage could last into the second half of 2021, but the company is able to weather the pain.
Ford shares closed 0.48% at $ 12.43 on Wednesday. The share fell about 3% in after-hours trading.