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. Next week, Ford will idle an assembly plant in Ontario, Canada, where it builds Edge and Lincoln Nautilus sport utility vehicles. LMC reduced its production forecast by over 250,000 units, with the possibility of another 100,000 units lost, for the first quarter, Rinna said.

Source: Mint February 24, 2021 15:45 UTC