NEW YORK, Oct 27 (Reuters) - The largest U.S. manufacturers
including General Motors, General Electric, 3M and Boeing face
logistics headaches and higher costs due to global supply
bottlenecks that are likely to persist into next year but agreed
the hit to profits can be mitigated by charging higher prices
for their goods.
Companies across the globe sounded the alarm on supply
issues months ago that have pushed prices higher on raw
materials from chemicals to steel.
In earnings reports this week investors got a closer look at
how companies are managing.
"It starts with really strong price," said GM Chief
Executive Officer Mary Barra in a call with reporters. "We were
able to do very well (with) full-size trucks and full-size SUVs.
We just can't build enough of those vehicles."
GM is also looking to wring efficiencies from its
supply chain and she said the chip shortage is likely to improve
in the second half of 2022.
Larry Culp, the chief executive of General Electric Co
, a maker of jet engines and wind turbines, told investors
keeping up with fits and starts in the global supply chain was
akin to playing a carnival game that aims to keep players on
"I'm not sure we're yet at a place where we would say that
things are stable," Culp told investors on an earnings call on
Tuesday. "It really is akin to playing a whack-a-mole."
General Electric also expects supply constraints to persist
through the rest of the year and in 2022, hurting profit in its
healthcare business. Boeing Co also complained of a
"severely weakened supply chain."
The pandemic has crippled many companies' ability to send
and receive the parts and supplies needed to make a wide range
of products, creating shortages, reducing inventories and
On Wednesday, Harley-Davidson said it increased
surcharge pricing in the United States to offset higher raw
material costs. The motorcycle maker expects these costs to
remain high and is exploring higher surcharge costs globally.
Harley-Davidson said the inventory shortage is also
squeezing its international market share.
McDonald's Corp also said it had to raise prices in
the United States.
Industrial giant 3M Co cut its full-year earnings
outlook on Tuesday and said it would increase product prices to
combat inflationary and supply chain pressures.
The company, which makes a long list of building and
construction products, said it was facing higher costs related
to polypropylene, ethylene, resins and labor. It added that the
global semiconductor crunch would continue to weigh on its
automotive and electronics end-markets.
On Tuesday, Lockheed Martin Corp dramatically
lowered its sales expectations for this year, saying the
pandemic has hobbled the top U.S. defense contractor's supply
chain. Its shares fell more than 11% on Tuesday.
Lockheed's chief financial officer said the problem worsened
for them over the last two months, as the maker of the F-35
fighter jet lowered its 2021 revenue expectations by 2.5% to $67
billion and said next year's revenue could fall to $66 billion.
(Reporting by Reuters staff; Writing by Bernard Orr; Editing by