Ford

[Mickey21]

Nobody buys a ton of anything in advance anymore. Holding inventory costs money and is a real drain on profits. Purchases are all made "just in time". COVID created global supply issues across all industries and sectors.

That't not entirely how this works. In the chip sector, they place orders for time allocations of their forecasted hardware needs, it isnt about paying up front and having stock, that isnt how that works at that multi thousand unit levels. Chip manufacturers have to know way ahead of time how much time will be allocated to fulfilling their orders.

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[Abramsman1]

Great. Instead of 12 broncos a day its down to 6... SMH lol. Idc anymore. I've accepted the fact that it's gunna be awhile no matter what. Cheers to another day down. Another day to go

 

[Mickey21]

Pretty bold statement if you never owned a business....do you know how many people dropped their res even before the commodity issues?

How do you know what I have owned, talk about bold statements.

Reservations and dropping and commodity issues are not about the chip shortage, dont lump one with the other just because, that is how they are spinning this at all. And if you don't think they don't have bean counters way smarter than you planning their part logistics, then you are dead mistaken. There are whole teams devoted to part allocations, ask me how I know? Besides owning my own multiple businesses even now, I consult for one of the largest chip logistics company in the entire world. It is my business to know and plan that forecasting. The companies I work for, well, we got it right, and our competitors are now hurting for it. Just part of doing a good job. These companies I work for ALSO don't hold stock, but we have to commit to orders and forecast that usage as close as humanely possible.

Why are you SOOOO possibly offended because I said that Ford got it wrong. Clearly they got it wrong, they wouldnt have an issue if they got it right and accounted for as much as they could.

 

[NotaVegetarian]

Wow, this is so wrong.

 

[Vigor]

Great. Instead of 12 broncos a day its down to 6... SMH lol. Idc anymore. I've accepted the fact that it's gunna be awhile no matter what. Cheers to another day down. Another day to go

I think the aftermath of this pandemic is and will have a bigger impact than we ever imagined. It is what it is. Of course it happens during a time when a vehicle we all LOVE finally decides to come out

 

[bigjwalt]

I must say, this thread too me back to my college years. At that time I was swearing I would never read about "Just in Time" sourcing or reviewing "annual reports" cover to cover. If that wasn't enough....the semiconductors got me thinking of symbolic logic classes and OS kernels, Bits, Bytes, etc. One of the more intelligent threads on this forum. Cant we please stick to paint color and tire size.

 

[Mickey21]

I work for consumer electronics design consultancy, While I have no knowledge of what Ford ordered I can say that almost all of our customer are being hit by the shortages and had orders in place to cover what they need.

If they are being hit, then largely it is falling outside of chip shortages itself, or a flow on effect from someone who did. Are there waves of effect of shortages, absolutely, but if you listed those companies, I bet almost all of them are reactive to something else up the chain, poor forecasting themselves, or aren't suffering 50% hits in their production. That is what is at discussion here. Not ANY shortage at all.

 

[DeltaBravo]

That would imply that it is high? Ford hasn't cracked $20/share in 20 years. It sits at $12.50/share as I type. If you are looking to invest than just do it. A buck or 2 isn't going to make that much of a difference in the grand scheme.

this this obvious you haven’t been paying attention to Ford stock. They had a dividend of roughly 5% up until 2020. Stock dipped down to 5 and has been climbing back. It’s price target is set at 15. I believe Ford will hit 20 dollars before the dividend is reinstated

 

[Razorbak86]

I'm aware of the fire and impact on the chip making market, I am a computer electronics engineer for over 35 years and am in this sector. Chip orders are typically placed around 9 months out from production to maintain the average flow. Ford along with other manufacturer's shorted this order due to reductions in demand during the pandemic and as is any chip order tends to reflect 6 months to a year from any reactive forces in the market due to this. Trust me, I am in the same industry with chip production and deliveries and know this very well, it is my job to know. You know who is largely impacted, the majority of manufacturers that reduced their orders.

Now am I placing blame only on them, clearly no, but don't tell me that those out there not affected because they largely kept their orders the same are being hurt by this "shortage". Is there an impact by something like that fire, yes, some, but 50%, yeah, no, that takes more than this. Why isnt Apple, Google, Dell, Intel, nVidia (they sold more chips than ever, it is just demand is incredibly higher), HPE (maybe not as good as an example with them, they are hurting due to lost market share), and the many other large chip relevant manufacturers feeling this 50% decline due to shortages? Because they largely didnt forecast it this badly.

The majority of chip manufacturers usually have between 15 and 30% overhead in chip manufacturing to deal with increasing in demand typically. It is just that NOW, that excess is all going to anyone willing to pay top dollar for that demand, looking at you nVidia, and even then we aren't experiencing shortages, we are experiencing too much demand.

I mean even their company release reveals a possible shortage of 10 to 20% depending on how you look at it and THAT I believe. If they shorted Bronco, well that was just stupid, they knew demand was high. But I dont think they did. I think in this case they are choosing to float any reserve part allocations to other product lines so that they dont take as much of a hit.

I hear you, and I appreciate your feedback.

For what it's worth, I wasn't necessarily responding to you per se. I was responding to many of the comments raised about the automotive chip shortage and the impact on Ford, simply because today is when Ford released its earnings for Q1, and there were a lot of confusing comments being made about the situation. Your post just happened to be the last one I read before I started typing.

As far as I know, the Bronco chip orders were not shorted and may not even be impacted. Nevertheless, as a Ford shareholder with a decent amount of shares, the impact on the corporation's guidance for 2021 is an important issue to me and presumably others on this thread.

 

[Mickey21]

Look at this smarty pants here. Just order more, duh!

There are none to order buddy.

Yeah, that A) isnt what I said, and B) has nothing to do with what I said. They KNOWINGLY reduced their chip orders, so did GM, among others. Now sales are coming back up and the flow on effect from their reduction in order has a ramification. It is like stocks, they bet wrong and lost this time, I don't think it along the lines of 50% like the OP speculates, also since Ford didnt say that either. But meh, believe whatever the heck you want to.

 

[DeltaBravo]

This is going to be a sale on Ford stock boys

 

[Mickey21]

This is very Incorrect information. It's not self inflicted, there's literally a world wide shortage on silicon. Its effecting anything and everything electronic. Major silicone suppliers also recently announced that shortages are expected to extend another 6-12 months minimum.

If you back those statements with examples of people who are hurting AND hurting to anywhere near 50%, I bet I can probably tell you why. We aren't talking about 10% swings one way or the other. We also aren't talking about reductions in production due to commodity constraints like "not enough people in a factory to make leather seats" for instance. Chip manufacturing is largely an automated production once the fab is online to produce said commodity. Does it have workers, yeah, but not to an extent of say a Ford truck assembly line. Much more robotics and less impact from skilled worker shortages when things are running along.

I think people confuse shortages and think they are all the same. Spinning up extra manufacturing in a chip takes years, so forecasting in this sector is very very very (did I say very) planned. This isnt like making MIC tops for a Bronco. They have been working sometimes a decade to produce this chip largely autonomously once they press "Go". Any interruption in this plan usually doesnt show for a year or so. So what do you think happened a year ago that we are just now seeing those results today. Hmmm, was it a HUGE reduction in US vehicle demand? Maybe just maybe?

 

[604Bronco]

If production is cut in half, at this point, just give me half a Bronco.

So you want a 2 door? lol

 

[mtap]

How do you know what I have owned, talk about bold statements.

Reservations and dropping and commodity issues are not about the chip shortage, dont lump one with the other just because, that is how they are spinning this at all. And if you don't think they don't have bean counters way smarter than you planning their part logistics, then you are dead mistaken. There are whole teams devoted to part allocations, ask me how I know? Besides owning my own multiple businesses even now, I consult for one of the largest chip logistics company in the entire world. It is my business to know and plan that forecasting. The companies I work for, well, we got it right, and our competitors are now hurting for it. Just part of doing a good job. These companies I work for ALSO don't hold stock, but we have to commit to orders and forecast that usage as close as humanely possible.

Why are you SOOOO possibly offended because I said that Ford got it wrong. Clearly they got it wrong, they wouldnt have an issue if they got it right and accounted for as much as they could.

Where did you get me being offended? I’m actually having fun watching comments like yours while drinking a beer...congratulations on your successful career!!! Super awesome! Maybe you should work at ford and show them how it’s done? Maybe we’ll get our Broncos sooner with you knowing how it should be done?

 

[Bdisco]

Ford said my Bronco is scheduled for build the week of June 6th and I’m holding them to that. Besides I got a guy at Frito Lay who can hook me up with all the chips I need.

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