“We remain on track to deliver $2 billion of material, manufacturing and freight efficiencies over the full year, which will partially offset higher labor and product refresh costs.”

In context

“our all-new F-150 launch, including drawdown of the inventory we had held at the end of the first quarter. We delivered $2.8 billion in adjusted EBIT, with a margin of 5.8%, as higher costs were partially offset by the continued strength in Pro. Costs were up year-over-year, primarily reflecting an increase in warranty reserves, higher new product-related material costs and higher manufacturing costs. Now if you take a step back and look at our sequential performance, Q2 saw revenue growth of 12% on a 9% increase in wholesales, driven by higher truck volume and the strength of our product portfolio. Despite this revenue growth, EBIT was flat, reflecting primarily higher warranty and manufacturing costs related to the inventory, which was driven by seasonality and the high-volume launches. We remain on track to deliver $2 billion of material, manufacturing and freight efficiencies over the full year, which will partially offset higher labor and product refresh costs. We are seeing emerging headwinds in warranty and inflationary pressures in Turkey, and we are working to mitigate these costs. Now, I have more confidence in today's business than ever. Our strong global product lineup is differentiated and driving continued top-line growth. And we're slowly but surely improving our industrial system and shedding behaviors that have held us back in the past. We're on track to deliver our full year guidance, and we are generating stronger and more consistent cash flow than just a few years ago, evidence that our Ford+ plan is working. Adjusted free cash flow was $3.2 billion in the quarter and $2.8 billion through the first half, resulting in a cash conversion rate of 51%. Our $1 billion increase to adjusted free cash flow guidance for the year underscores”