Ford’s Q4 2022 results landed $2 billion below what analysts had estimated, and the miss landed particularly hard given that GM reported better-than-expected results in the same period. The contrast is difficult for Ford’s management to explain away, though they tried.
The supply chain excuse — chip shortages, elevated materials costs — is genuine as far as it goes. Ford did leave significant revenue on the table because it couldn’t build vehicles it had demand for due to incomplete components. Tens of thousands of partially built vehicles sat in holding lots waiting for semiconductor parts that arrived late. That’s a real problem, and it affected Ford’s Q4 more than some competitors.
But supply chain problems don’t fully explain the gap versus GM. The two companies faced broadly similar external conditions, and GM executed better. Part of that is product mix — GM’s truck and SUV margins are strong and those products have been less affected by supply disruptions than some of Ford’s higher-tech offerings. Part of it is warranty and quality costs, where Ford has been running significantly higher expenses than competitors due to recall campaigns and quality issues that have been a persistent drag on the income statement.
Ford’s Model e EV division is losing substantial money per quarter, and the company is being transparent about this — unusually so, given how some automakers blend their EV losses into overall reporting. The losses are being positioned as necessary investment for long-term positioning, which is the right framing analytically. But the scale of those losses, combined with the combustion business execution issues, creates a picture of a company under real financial pressure even as its product lineup includes some genuinely impressive vehicles.
