Home Business Ford restructures supply chain after $1 billion in unexpected costs

Ford restructures supply chain after $1 billion in unexpected costs

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Ford CEO Jim Farley at the company’s plant in Dearborn, Michigan, where the electric F-150 Lightning is produced, on April 26, 2022.

CNBC | Michael Weiland

DETROIT – Ford motor on Thursday announced plans to restructure its global supply chain, days after the company said it expected to book an additional $1 billion in unexpected supplier costs during the third quarter.

The supply chain restructuring aims to “support efficient and reliable component sourcing, internal development of key technologies and capabilities, and world-class value and quality,” the automaker said. – says the release.

Ford Chief Financial Officer John Lawler will lead the effort on an interim basis until a chief supply chain officer is selected. Lawler enters at a time when parts and costs of raw materials for automakers and suppliers have skyrocketed during the coronavirus pandemic. The increase came amid serious supply chain challenges, including a lingering global shortage of critical semiconductor chips.

Ford said on Monday that recent negotiations resulted in inflation-related supplier costs rising $1 billion higher than previously expected in the third quarter. The announcement, which included a preview of some expected earnings, sent Ford shares higher worst day in over 11 years.

Jonathan Jennings, Ford’s vice president of supply chain, will also take on additional responsibility for technical support and supplier quality, the company said. He will report to Lawler.

Supply chain plans were announced in addition to further changes and executive appointments related to electric vehicles, product development and other areas of the company’s operations.

Ford said the change is about getting the CEO up to speed The Ford+ Plan by Jim Farley for growth and value creation”.

Ford shares fell after the company warned of $1 billion in additional costs

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