DETROIT — Ford Motor Co. posted a surprising $3.26 billion first-quarter net profit on Wednesday, but the company said a worsening global computer chip shortage could cut its production in half during the current quarter.
Chief Financial Officer John Lawler said the second quarter should be the low point for the chip shortage, but it probably will last into next year. The situation will improve in the second half, but Ford still will see production fall 10% over original plans, he said. That means Ford won’t be able to make up for any lost production this year. But CEO Jim Farley said Ford will work to limit the 10% cut.
The company expects to lose factory output of 1.1 million vehicles for the year, up from an earlier estimate of 200,000 to 400,000. That will mean fewer vehicles to sell, but thus far it’s brought higher prices because demand is strong.
Nearly all automakers are struggling with the chip shortage, caused by semiconductor makers switching their factories to more profitable consumer-electronics processors when auto plants closed due to the coronavirus last year. The auto factories came back faster than expected, but the chip makers didn’t quickly switch their factories back to automotive-grade chips.
Farley said at first, the company thought it could make up lost production later in the year. But a March fire in Japan at a Renesas Electronics Corp. chip foundry made things much worse. Renesas supplies about two-thirds of the auto industry’s chips, including nine top-tier parts makers for Ford, Farley said.