Commodity prices continued to be a headwind for Ford Motor, CEO Jim Farley told CNBC’s Jim Cramer on Wednesday, but the company has managed to offset them through its pricing strategy.
“The commodity pressure, the premium freight we’re seeing, I mean it’s really real. … The good thing is, our pricing has offset all of that. I believe we’re underearning as a company, so we have more costs to do this year, next year, next couple years,” Farley said in an interview on “Mad Money.”
Some of the commodities where Ford has seen higher costs include steel, aluminum, nickel, cobalt and lithium, according to Farley.
“We had a couple of really bad commodities that held up our most profitable units and we think that’s an area where we have upside in second quarter, second half,” he added.
Farley’s comments come as Wall Street fears that higher costs and supply chain snarls will strain General Motors’ and Ford’s earnings this year.
The chief executive also said that the company plans to take further pricing action, particularly on its electric vehicles. Farley told CNBC on Tuesday that he believes the company will be able to produce 150,000 F-150 Lightning EVs within the next year or so, even in the face of supply chain woes.
Ford reported better-than-expected revenue and earnings in its first quarter on Wednesday. Shares of Ford climbed about 1% after hours.
Disclosure: Cramer’s Charitable Trust owns shares of Ford.
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