Ford’s $1.7 Billion Loss Reported Following UAW Strike Impact
Ford has experienced a significant setback, with a loss of $1.7 billion in profits attributed to the six-week United Auto Workers (UAW) strike. The strike, which began on September 15 and concluded on October 25, resulted in a decline in sales by approximately 100,000 vehicles.
This production lag has had a lasting effect on Ford’s financial outlook, leading the company to revise its earnings guidance for 2023 to $10-10.5 billion before taxes. Prior to the strike, it had projected $11-12 billion.
“As a result of the strike, Ford’s full-year 2023 earnings are expected to be between $10 billion and $10.5 billion before taxes,” CFO John Lawler stated. The strike also impacted the production of Ford’s high-margin trucks and SUVs, contributing to a predicted $1.7 billion in strike-related lost profits, with $1.6 billion attributed to the fourth quarter.
Ford CFO John Lawler mentioned that the new UAW labor agreement could result in significant costs of $8.8 billion over the contract’s duration, with an expected cost effect of around $900 per vehicle by 2028. Despite these challenges, Ford remains optimistic about its long-term strategy, emphasizing the Ford+ plan to position itself at the forefront of the evolving automotive industry.
Lawler highlighted the importance of Ford+ in navigating the ongoing technological transformation, stating that the strategy is designed to make Ford a thriving player in an industry undergoing significant changes. He noted that the anticipated cost effect would be roughly $900 per vehicle by 2028, constituting approximately 60 to 70 basis points of adjusted EBIT margin. Ford plans to release its fourth-quarter and full-year 2023 financial results, along with initial guidance for full-year 2024, after the close of business on February 6.
ⓒ 2023 TECHTIMES.com All rights reserved. Do not reproduce without permission.
