One Michigan dealer has created an emergency fund for its salespeople to draw from after that happens — likely sometime this month.
“We know for sure there’s going to be three months of heartache and hand-wringing,” said Mark O’Brien, chairman of Roy O’Brien Ford. “We don’t want our people having concerns about where the next meal’s coming from.”
The microchip shortage is expected to slash Ford’s vehicle output by half this quarter, holding back the company at a time when resurgent consumer demand would otherwise send profits soaring. A crisis that initially was expected to ding 2021 output by just a few hundred thousand vehicles is now on track to cost the company 1.1 million and zap $2.5 billion from the bottom line.
Ford now expects to earn less money in the last nine months of the year than it did in the first quarter alone. The dire outlook cast a pall over a company that is finally starting to reap the rewards of an overhauled product portfolio and win over skeptical investors after years of restructuring.
“There are more whitewater moments ahead for us that we have to navigate,” Farley said after announcing a $3.3 billion first-quarter net profit.
Ford stock, after months of steadily climbing, sank 10 percent the next day.
“Ford’s 1Q was far ‘too good’ to extrapolate while the remainder of the year is ‘too challenged’ to extrapolate,” Adam Jonas, a Morgan Stanley analyst, said in a research note.
“Put it all together and the most favorable auto supply/demand balance in a generation and Ford’s cost-cutting efforts are bearing fruit at a critical time for the House of Dearborn. 2021 is likely to go down as an ‘oddball’ time for the industry given the confluence of consumer strength, inventory tightness and extremely disruptive supply chain issues.”