Ford CEO Jim Farley says pricing will offset rising supply costs

Commodity prices continue to be a drag on Ford Motor, CEO Jim Farley told CNBC correspondent Jim Cramer on Wednesday, but the company has managed to offset them with its pricing strategy.

“The pressure of goods, the premium shipping that we are seeing, I mean it’s really real… It’s good that our prices make up for all that. I believe that we are underperforming as a company, so we have more costs. do this year, next year, next couple of years,” Farley told Mad Money.

Some of the commodities that Ford has higher prices include steel, aluminum, nickel, cobalt and lithium, Farley said.

“We’ve had some really bad merchandise that has held up our most profitable divisions and we think this is an area where we have upside potential in the second quarter, in the second half,” he added.

Farley’s comments come amid Wall Street fears that higher costs and supply chain disruptions will hurt General Motors and Ford’s earnings this year.

The CEO also said the company plans to take further pricing action, especially on its electric vehicles. Farley told CNBC on Tuesday that he believes the company will be able to produce 150,000 F-150 Lightning electric vehicles over the next year or so, even with supply chain issues.

On Wednesday, Ford reported higher-than-expected first-quarter earnings and earnings. Ford shares rose about 1% after hours.

Disclosure: Cramer’s Charitable Trust owns stock in Ford.

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