Chip Shortage May Cut Ford, GM Auto Earnings: Moody’s
- Ford to shut down Ontario plant next week on supply crunch
- Surging demand for cars and consumer goods triggering shortage
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The global semiconductor shortage will slash automotive earnings at General Motors Co. and Ford Motor Co. by about one-third this year as supply constraints hamper production and profits, Moody’s Investor Service estimates.
The chip shortage will materially erode margins and could lower expected automotive earnings before interest and taxes by as much as $2 billion for GM and $2.5 billion for Ford, the ratings agency said in a note published Tuesday. GM’s EBITA margin could fall to 3.4%, while Ford’s could dip as low as 1.8%, according to Moody’s. The ratings agency did not include profits from the finance units and equity income from Chinese operations in its estimates.