Ford motors along despite commodity price rises

27 April 2011

27 April 2011 | Adam Leach

Automotive giant Ford expects rising commodity prices to cost the company an extra $2 billion (£1.21 billion) in 2011, according to its report on the first quarter.

Results released yesterday paint an optimistic picture for the car manufacturer, with a reported profit of $2.55 billion (£1.54 billion). However, it also shows that the amount spent on commodities this quarter increased by $300 million (£182.21 million), with a total increase of $2 billion (£1. 21 billion) forecast by the end of the year.

Ford president Alan Mulally said: “Our progress towards delivering profitable growth for all will continue as we aggressively manage short-term challenges and opportunities.”

The production increase for the second quarter suggests the company has not been hit too hard by problems prompted by the earthquakes in Japan last month that caused major disruptions in the supply chains of numerous car manufacturers. The report said that by using pipeline inventories, Ford managed to minimise the impact on its supply chain.

Japan-based manufacturers Toyota and Mitsubishi suffered severe disruptions after the earthquakes. The impact also reached as far as the US where General Motors had to halt production because it was unable to source components from Japan.

For more details on the report click here.

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