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Ford Stock Slides as Toyota Slashes Production, Volkswagen Warns on Chip Shortage

Toyota, the world's biggest carmaker, will slash its September production run by 40% amid a shortage in semiconductors and COVID-linked plant closures.

Ford Motor Co.  (F) - Get Ford Motor Company Report shares slumped lower Thursday, with General Motors  (GM) - Get General Motors Company (GM) Report following suit, as investors reacted to plans from the world's biggest carmaker to slash production amid the ongoing shortage in semiconductor supplies. 

Toyota  (TM) - Get Toyota Motor Corp. Sponsored ADR Report, the world's biggest carmaker, said it would produce around 360,000 cars worldwide next month, a 40% reduction from its recent average, but pledged to hold its 2022 financial year target of 9.3 million. World number two Volkswagen  (VWAGY) , meanwhile, cautioned Thursday that the "supply of chips in the third quarter to be very volatile and tight" and said it can't rule out a cut to its production schedule over the coming months.

Ford, which only yesterday unveiled plans to temporarily shutter an F-150 assembly plant in Kansas City, told investors last month that "navigating these chip constraints has led us to make important permanent changes in our business model"

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Ford shares were marked 1.9% lower in early trading Thursday to change hands at $12.76 each. General Motors shares slumped 2.7% to $49.45 each.

Ford posted second quarter earnings of 13 cents a share on revenues of $26.8 billion, well ahead of the Street consensus of a 3 cents per share loss on July 28, and lifted its full-year profit forecast to around $5.5 billion.

Earlier this year, GM warned that chip shortages would cuts its 2021 earnings by as much as $2 billion, with vice president Phil Kienle noting that it "remains complex and very fluid."

GM's second quarter earnings were disappointing last month, but it lifted its full-year outlook to an adjusted range of $5.40 and $6.40 per share.