Ford plans a restructure of the supply chain following unexpected quarterly costs of $1 billion.

Earlier in the week, Ford stated that recent negotiations caused supplier expenses totalling $1 billion higher than expected during Q3. The announcement combined with a pre-release of some of its earnings expectations, has resulted in the company’s stock levels being “worst in more than 11 years” (CNBC). According to Ford spokesman T.R. Reid, changes to Ford’s supply chain have been underway for some time due to problems with its transition to electric vehicles (CNBC) The efforts will be led temporarily by CFO John Lawler until the newly created chief supply chain office role is fulfilled. Although, this is not the first time we have seen spokesmen try to take from their bad performance levels. Additionally, the company has added that Jonathan Jennings, vice president of the supply chain, will also take responsibility for the losses. This could knock the confidence of investors as changes should have been implemented earlier to avoid this from happening.  

John Lawler must fill his boots during these difficult times, where the costs of raw materials and parts for auto manufacturers have been soaring since the coronavirus pandemic. The ongoing global shortage of crucial semiconductor chips and the rising competition of electric vehicles hasn’t done any good for the automaker either.  Finally, the above changes are an acceleration of CEO Jim Farley’s “Ford+ plan” for growth and value creation. Undoubtedly one to look out for in the upcoming quarter!