caroline: from bloomberg world headquarters. ford is what we want to focus in on. shares are rising after reporting's beat estimates. it still continues to point out the issue of availability for semi conductors.

ford's numbers come on the same date when gm said it expects shortage to last until next year. we're going to dig into the supply chain affect. taylor: let's start by recapping the third quarter. automotive revenue ahead of estimates. boosting the full year outlook. we are seeing some positivity. the semi conductor availability remains a challenge. this is a company that has the inventory and as much control as they can. we are also getting these headlines ford says the chip shortage could extend into 2023. how does the company continue to navigate all of these issues? let's ask the expert.

what do you make of the chip shortage and how ford is able to navigate? >> it is obviously pressure across the global industry. the key thing to keep in mind in terms of today's results, ward -- ford in the second quarter was more exposed to the plant that had a fire. gm was more exposed this quarter with malaysia plants being down. i would put the two quarters together and ford definitely came out of it with strong chip production. i think it's going to be tight chips and supply chains well into 2022 if not 2023. >> what levers does fort have to weather the storm better than peers? especially as it goes to the challenging transition into electric? >> the key one is pricing power.

it has the newest pickup truck on the market. it looks like it lost share earlier in the year because of supply constraints. it has a strong product lineup with the new bronco, the maverick coming up. before you get to electric vehicles, it has a strong product cadence. combined with tight inventories industrywide, it can move the needle on price. caroline: it's lucky that it can. headline says ford sees commodity costs up $3.5 billion in 2021. those were issues we see with metals, what's happening with the supply chain in china. those increases in costs, do you think they can pulley -- fully pass on? >> as long as the chip supply

and others remain tight, they can pass it on. there is an issue for the industry that commodities stay elevated but there's enough chips and metals to make the vehicles, the pricing could come down in the showrooms. that's were i get back to the issue of rent differentiation. if you are one of 14 look-alike utility vehicles, it's going to be hard to hold onto pricing. if you talk about an iconic truck like the bronco or the f15 0, it's going to be easier to hold onto the price gains even as commodities remain high. caroline: commodities are high and supply chains are clogged up. gm was on earlier with david westin talking about how they are managing their supply chain constraints. >> we have seen recovery from

the impact in q3 from the supply base that caused deeper impact. i am optimistic that we are through the worst of it. we have shared our safety protocols with the supply base around the world. that's what gives me confidence that were going to see a stronger q4 and q1 and even as we get to the second half of next year, continued improvement. >> you look at ford and gm, do you make positive from what you heard from her earlier? >> i think it's very consistent with the chip shortage is that could linger into next year and we don't know the unknown unknowns of other supply chain constraints. ford uses the f150 mostly

aluminum, we think that's going to be question number one with how they plan to guarantee those supplies. the silver lining is the showroom pricing. taylor: talk to us about that pricing. particularly the strength may be overseas. >> pricing isn't quite a strong overseas as it is in north america. in north america, you look at the records they are getting, the days of $5,000 off and 0% financing and dealers having to kick in extra are long gone at least this year in the auto industry. sonali: how much are prices supposed to edge higher given that the chip issues are going to last a while? >> you have to look vehicle by vehicle.

there are dealers who have additional markups, it's an opportunity to recapture some of that. interest rates are low, plus the trade-in values with cars are very strong. consumers probably not seeing a big increase in the monthly payments they are making on these expensive trucks. i expect they are coming into a showroom with a trade-in that is worth significantly more. caroline: these are companies that are seeing significant falls in the profitability, they are doing better than many had factored in. we leave you to go jump on the analyst calls. more breaking news when it comes to the labor force. starbucks is think they will

increase the amount they are paying to laborers to nearly $17 average hourly pay. that's going to happen in the summer. this is as we have a stubborn labor shortage and companies looking to raise wages to entice them in. all of this discussion continues to pivot around the world of supply chain, the issue of reopening. to talk about how quickly we can rectify things is our next guest. stick with us. this is bloomberg. ♪

caroline: last week we brought you special coverage of the supply chain crisis from california where a record number of cargo ships are waiting to unload. we talked about the chip shortage. >> used and new car prices have gone up. there isn't relief in the immediate term because we know we have the microchip shortage on the new-car side that will prevent people from buying new vehicles and that is trickling to the used-car side. used-car prices are high also. it's tough out there for car shoppers. caroline: we want to dig into that. our guest knows the chip sector

like no other. we are seeing from ford this is going to go on until 2022 or 2023. what makes it get better? >> the problem is it's going to depend on the model. they only need to be short one chip and they can't assemble a vehicle. the thing that is making the shortage worse is that people are ordering extra just in case. there is still shortage, but you only have to be short one chip to not be able to assemble a vehicle. the extra inventory is exacerbating the shortage. if you look at the numbers that have come out, earlier tsmc said they were controlling output by 30%. the chips are going somewhere.

what's going on with the shortage? i think a lot of it is in those little stock files in various places just in case. taylor: the industry is cyclical when it comes to pricing. what are you noticing about the pricing power? how does it shift? >> right now, chipmakers have all announced price increases for next year around 20%. i should point out especially in cases like the automotive sector, the chips that they use tend to be on older technologies. the chipmakers are very careful about increasing capacity there because the last thing they want to have his excess capacity and a commodity sector. what has exacerbated the shortage is shortage of investment coming up to the

pandemic. capacity was tight. now, they have the pricing power. if they increase the output, you have to wonder that sometimes -- at some point someone has to use all these chips. there is also a risk of excess capacity and softness down the road when the shortage gets alleviated. that has historically been the pattern. sonali: wondering who the winners and losers are in the game, we are waiting on a massive ipo pricing tonight with global foundries. who wins at the end of the day from some of these constraints? >> global foundries, you have to wonder the timing of that ipo is as good as it can get. good news for them. i think some of the established bankers who have been the go to

suppliers like tsmc, they have to be able to command price because they have a lot of capabilities that others don't. you have to look for who are going to be the marginal producers if there is a surplus capacity, they are the ones going to get squeezed. caroline: longer-term when you see global foundries coming to the market and the excitement in on shoring, does that remain a long-term game that the u.s. will be a producer of chips beyond the crisis? >> that is certainly the bet that a lot of people are making especially with so much emphasis on -- intel is increasing their investment. goebel foundries has increased -- announced more investment. the rumor is samsung will have to expand in the u.s. as well. the bet is that rising demand

from all of these applications like cloud data centers, digitization everywhere, the bet is that the demand will continue to rise. right now is a great environment for people to go after subsidies, because the u.s. government depending on the fate of the chip sector, there is talk about extensive subsidies. if you want to build a plant in the u.s., this would be a good time to try to compete for the subsidies. longer-term, you have to bet on both. -- growth. taylor: how long does it take that to ramp up? if you invest in manufacturers in the u.s., does it ramp up enough in time? >> that is usually the problem. if you're looking at automotive chips, they are using older technology. global foundries would be well-positioned to capture that.

intel has been talking about converting their plant in ireland to serve the automotive market. those technologies have been trailing for some time and that will be susceptible to excess capacity. people have to be careful. on the leading edge technologies, the things that tsmc is leading in supplying companies like apple, qualcomm, mediatech, nvidia, it is all about capabilities. the question will be, the u.s. government and many want to see those leading-edge capabilities in the united states. the question is, how long will it take those capabilities to develop? that's much longer term play than just building another factory. not only do you have to get the equipment, you have to get the capabilities and process and a lot of practice. if the question is how long will

it take for intel to catch up? that could be five plus years or longer. caroline: you are almost three decades in the industry. is this most exciting chips have ever been? >> it's pretty exciting. if you follow the chip industry, as long as i have had any connection, it is always been exciting because the spectacular increases in performance that receipt. back in the mid-90's, i used to sell computers that cost $32 million then. now, you have that power in your phone. it's an amazing industry. taylor: spoken like a real professor. the chip industry is always exciting. we appreciate your time. coming up, drivers might be ready to make the jump to

electric vehicles. dealers are still having trouble getting them off the lot. we will explain why. this is bloomberg. ♪

caroline: earlier this week, hertz made a huge move ordering 100,000 teslas. that order sent tesla's shares soaring. hertz reached an exclusive deal with uber. there might be more secondhand cars as they start selling off

their existing fleet. sonali: it might be hard to buy an ev, but maybe you want to rent one. taylor: cars are so complicated now, if you're trying to rent a tesla -- caroline: i can hardly unlock them. sonali: there's a button for the parking thing. taylor: you can't even open up, there's no gas station for tesla, but you can't even find the button. let's discuss more about user air. -- user error. our guest wrote an interesting piece this week. it is one of the biggest hurdles to get americans to buy electric goals. training salespeople. what are the hurdles for the salespeople? >> it's a good question, and what i'm hearing from dealers is that the people helping dealers

sell cars, it's harder to sell and ev than a regular combustion car. it's like back when iphones were coming out and we were all trying to deal with this completely new technology on a new platform. we didn't even know how to turn it on or charge it. it's kind of like that with electric vehicles. we are having to relearn habits. the biggest habit is fueling it. we are having to relearn daily lifestyle habits to make the thing run to begin with. what i'm hearing is a lot of the people selling them have never owned or driven one. it's a lot more difficult to sell something you've never driven. caroline: what are the dealers doing? are they getting the salespeople

into one? >> the whole idea is to get into the thing and explore. a lot of dealers are bringing in outside help. special teachers and trainers that sit down with the dealers and teach them. this is how you download the app to find charging stations. this is the difference between a level two and another charger. these are the things the car might be qualified for in our state and city. all of these things take some time to go through. they are easy or intuitive. dealerships are bringing in outside help to give seminars with their salespeople to lead them through the step-by-step. i have heard there making special hangtags to hang on the rearview mirror of these new vehicles that give the

salespeople a cheat sheet so they can remember this car qualifies for this rebate and it will get this tax credit. it's a big lift on a lot of different fronts. caroline: amazing story. amazing friction and trying to sell your latest goods even if you can get the chips to make them. thank you for joining us from l.a.. amazing how much we continue to talk about the blockers to the industry. yes, ford is up after hours and they are doing better than inspected -- expect, but their profits are eroding. taylor: the ford ceo statement that the chip shortage would last through 2023, but they expected to ease in 2022. i thankfully am not in the market for a car, but i hear as romaine would say -- sonali: they don't how to teach

people to buy evs. keeping an eye on this ipo, it's massive. taylor: bloomberg technology is up next. have a great evening. ♪

>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang.