Ford to provide update on financial impact of chip shortage next month

FILE PHOTO: A Ford logo is pictured at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany September 10, 2019. REUTERS/Wolfgang Rattay

DETROIT (Reuters) -Ford Motor Co said on Wednesday, while announcing the latest North America production cuts at seven assembly plants due to the global chip shortage, that it would provide an update on April 28 to the expected hit to its 2021 profit.

The U.S. automaker previously said its operating profit this year would be reduced by $1 billion to $2.5 billion. The update to that forecast will be provided when Ford reports first-quarter results on April 28. A spokeswoman declined further comment.

U.S. rival General Motors Co previously said its 2021 profit could be shaved by up to $2 billion due to the chip shortage.

Earlier on Wednesday, GM Chief Financial Officer Paul Jacobson, speaking at a Bank of America conference, said he still felt comfortable with the company’s 2021 profit forecast despite the chip shortage. GM said in February that, including the chip hit, it expected to earn $4.50 to $5.25 a share this year.

The chip shortage came as North American auto plants were shut for two months during the COVID-19 pandemic last year and chip orders were canceled, and as demand surged from the consumer electronics industry as people worked from home and played video games. That has now left carmakers competing for chips.

Semiconductors are used extensively in cars, including to monitor engine performance, manage steering or automatic windows, and in sensors used in parking and entertainment systems.

Reporting by Ben Klayman in DetroitEditing by Leslie Adler and Matthew Lewis