CEO Farley says Ford was able to offset almost all chip shortage impact

[Razorbak86]

Does anyone really believe Ford would be suffering a chip shortage if one overseas plant became disabled?

The Renesas plant burning is real and had a major impact to certain auto-makers, but you are right that it is far from the only chip supply problem. The Japanese government stepped in to help secure replacement equipment and full production is expected to be back online soon. The bad news is that it typically takes about 2 months to produce and deliver automotive grade chips, so that means end of July for parts. Then add a month for chips to be integrated in modules and finally installed in truck.

My assumption is that Renesas is the supplier for chip in modules missing from the partially assembled Ford trucks. Unknown if part is also used in Bronco.

The Renesas fire that destroyed the Naka 3 plant’s 300mm wafer fabrication line in Japan on March 19, 2021 clearly exacerbated an already tight chip supply chain post-COVID. Renesas accounts for 30% of the global market for automotive microcontroller units, and that plant was a single-source supplier for some of Ford’s chips and a dual-source supplier for others. Volkswagen, Mercedes Benz, and others were also affected by the fire.

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[North7]

YEP! Explain thousands of trucks parked awaiting chips. My understanding from a Ford employee is there are thousands more F-150's parked at the Detroit Int. Airport waiting only for chips. Ford certainly is not transparent and hasn't offset anything other than B.S. Just because you say your being transparent doesn't make is true.

Bingo

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https://maps.app.goo.gl/SB8L3dkSzoGUBT6s6

 

[Razorbak86]

Glad you chimed in with this, as this is a topic in my profession.

Although I don't advise on automotive manufacturing, I do on market demand, margin, scale, risk, and future scope in several industries.

Basically, Ford, like anyone in this situation would will focus on products with high profit margin. "Translation" (shit that's cheap and easy to build that you can sell at a high price). The F-150 is one of the highest margin vehicles in history if not #1. Pickups are cheap and easy, yet regularly sell for well over $50K which is only profit for companies which is why Dodge/RAM survived the 80's and 90's.

The Bronco is no different. Margins are likely less than the F-150, but in a similar way, you have a platform that is basically sub $20K in materials, add labor, R&D, and it's at maybe $25K, that can then be scaled up to a vehicle costing somewhere in the $70K range with EOS parts (Think Warthog) and an average selling price of $45K (guess). That's a product you want to sell and fast before people take notice and change their minds.

Well, changing of minds has never happened with the pickup truck, so why think it would start now. Inefficient as Bronco will be (like a pickup), it will sell like crazy and that creates a few problems.

Someone asked "why rush the Lightining?" Simple, that and the Mach-E offset the Bronco and F Series pickups which get the company in trouble. Ford needs to sell them all at the same time to balance things out and not take the energy hit.

Most important, these inefficient trucks that everyone seems to want are the rolling equivalent of printing money.

"So what's the problem?" Poor planning and a culture of conservatism over honest analysis. I fire people who hold things back in their analysis.

Ford's Board will likely fire a few as well. May not be the CEO, but I'd bet his ass is on a short leash.

I agree with a lot of what you’ve said, except for the last paragraph. Jim Farley’s job at Ford is about as secure as Nick Saban’s was at Bama at mid-season 2009.

The board just handed him the reins in October, and the stock price has almost doubled in 8 months, largely in response to the change in leadership. The Q1 earnings beat (4x Street estimates) only solidified his position. He ain’t going anywhere.

 

[MadMan4BamaNATL]

I agree with a lot of what you’ve said, except for the last paragraph. Jim Farley‘s job at Ford is about as secure as Nick Saban’s was at Bama at mid-season 2009.

The board just handed him the reins in October, and the stock price has almost doubled in 8 months, largely in response to the change in leadership. The Q1 earnings beat (4x Street estimates) only solidified his position. He ain’t going anywhere.

Yep, he's new, but these next two roll outs weren't his idea, (Bronco, Lightening) but they're around his neck. If he can move these units out of the door, he'll take some credit. By the way, almost all stocks are doing well right now (speculative market), but your point is well taken.

Safe as Saban would mean he's God, and he ain't that....yet. I'll reconsider once we get our damn Broncos!

 

[bronc'o]

 

[Razorbak86]

Yep, he's new, but these next two roll outs weren't his idea, (Bronco, Lightening) but they're around his neck. If he can move these units out of the door, he'll take some credit. By the way, almost all stocks are doing well right now (speculative market), but your point is well taken.

Safe as Saban would mean he's God, and he ain't that....yet. I'll reconsider once we get our damn Broncos!

I said safe as Saban at mid-season 2009. Turnarounds don’t happen overnight. (Remember, Saban's first team at Bama lost 4 of its last 5 games, including a 6th straight loss to Auburn, and ended the season 7-6.) He didn‘t get a statue until later, but you would have to agree that his job was pretty secure by mid-season 2009.

 

[Ramble_Offroad]

IMPO - Just like the extra PR around the Lightning, this is all about damage control in the attempt to stabilize market confidence.

Ford is marketing their futures. “Don’t look here and now...look at all the cool stuff we’re going to do in the future”.

I’ll go back into my cave now and practice inner peace. (Cracks beer)

 

[MadMan4BamaNATL]

I said safe as Saban at mid-season 2009. Turnarounds don’t happen overnight. (Remember, Saban's first team at Bama lost 4 of its last 5 games, including a 6th straight loss to Auburn, and ended the season 7-6.) He didn‘t get a statue until later, but you would have to agree that his job was pretty secure by mid-season 2009.

Hey, that was 2007. We won that title against Texas in 2009. We literally took the soul of Texas away. I can still see the tears and hear the crying as they slipped into the night......

Ha ha! RTR

 

[rtaylor]

Explain thousands of trucks parked awaiting chips. My understanding from a Ford employee is there are thousands more F-150's parked at the Detroit Int. Airport waiting only for chips.

By fingering Renesas as the culprit, Ford CEO's underlying message to investors was clear. Investors are aware that the Renesas chip fab is nearly restored, which means that trucks are likely to be flowing again in 2 or 3 months.

 

[Fatdaddy]

 

[GO_SOONERS_TXSUX!]

So when the hell are we suppose to get our May email on tentative build date on these Broncos?

 

[North7]

So when the hell are we suppose to get our May email on tentative build date on these Broncos?

May 2022

 

[1975U15]

I agree with a lot of what you’ve said, except for the last paragraph. Jim Farley’s job at Ford is about as secure as Nick Saban’s was at Bama at mid-season 2009.

The board just handed him the reins in October, and the stock price has almost doubled in 8 months, largely in response to the change in leadership. The Q1 earnings beat (4x Street estimates) only solidified his position. He ain’t going anywhere.

Agree. However would submit the run up on the stock price also had a lot to do with 200k Bronco and Lightening reservations which were in development or announced before farleys arrival. See the pop in Ford stock after Bronco and Lightning launches.

The Tesla reservation model Ford adopted is very favorable when considering baked in sales and demand 12-18 months later which the stock market eats up. It is predictable rather than uncertain. It’s why the news on chip shortage so far has been after thought for the stock.

 

[1975U15]

So when the hell are we suppose to get our May email on tentative build date on these Broncos?

When the Longhorns beat the Sooners again.

Had to laugh at your username. Good stuff.

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