Ford stops delivering 45,000 vehicles in September due to lack of parts

The still clogged global supply chain continues to wreak havoc on the auto industry.

Ford said on Monday that it will end September with between 40,000 and 45,000 large pickup trucks and SUVs that it can’t finish because it doesn’t have all the parts.

Negotiations for various supplies, which Ford did not identify, are driving up its costs.

The company warned on Monday that shortages and rising prices for supplies will cost $1 billion more this quarter.

Ford shares fell 5% in pre-market trading on Tuesday (20).

The problem of incomplete vehicles is likely to be a temporary setback: while many of the incomplete vehicles are highly profitable for the company, Ford said it should be able to meet its full-year profit targets.

That’s because Ford plans to transfer the sales revenue it will get from near-completed vehicles to the fourth quarter.

Automakers have struggled with a number of supply chain issues, specifically a shortage of computer chips, which has strangled vehicle production for much of the past two years.

The average vehicle has hundreds of computer chips, which control virtually every onboard system: they regulate fuel flow, help manage fuel economy, control collision avoidance safety features, and operate lumbar support and seat heaters.

This isn’t the first time Ford has built vehicles with most but not all of its computer chips as expected.

In March, the company announced that it would ship some SUVs without all their less-critical chips and add them later, after they are sold to customers.

Sometimes it was forced to temporarily close some factories due to a lack of chips.

Vehicle shortages, combined with strong consumer demand, have caused vehicle prices to soar to record levels.

Much of the windfall from higher prices goes to car dealerships—which are independent companies—rather than automakers, as most buyers are now paying above the manufacturer’s suggested retail price, or sticker price.

It has been common practice for decades for customers to pay less than the sticker price.

Ford and other automakers continue to predict that supply problems will improve.

In July, CFO John Lawler told investors that the company expected to see an “increase in [em] volumes throughout the second half of the year as some of the chip restrictions eased.”

It’s not just automakers dealing with supply chain problems and shortages.

A poll of members released by the National Association of Manufacturers on Monday showed that 78% say supply chain disruptions are their top business challenge, with just 11% now believing improvement will come by the end of the year.

The survey also found that 76% cited higher raw material costs, such as those highlighted by Ford, as a problem, with 40% saying inflation pressures are worse today than they were six months ago.

And 76% said they are having trouble finding the workers they need.

There is also growing concern that the US economy could enter a recession soon, with most manufacturers expecting a recession later this year or in 2023.

“Three out of four manufacturers still have a positive outlook for their business, but the optimism has certainly diminished,” said NAM CEO Jay Timmons.