Ford Lost $1.7 Billion in Profits from UAW Strike

By Dean Seal

Ford Motor has provided a new annual earnings forecast after previously withdrawing guidance due to the United Auto Workers strike, which the auto giant said resulted in $1.7 billion in lost profits.

The Dearborn, Mich.-based company said Thursday morning that it now expects adjusted earnings before interest and taxes of $10 billion to $10.5 billion, down from its previous guidance for $11 billion to $12 billion.

The figure includes $1.7 billion in strike-related lost profits, $1.6 billion of which came in the fourth quarter, from interruptions in production of high-margin trucks and SUVs and lower vehicle wholesales than previously expected.

Adjusted free cash flow is now projected to be between $5 billion and $5.5 billion, down from a prior outlook for $6.5 billion to $7 billion.

The strike was resolved in late October with a tentative labor deal that Ford now says will cost $8.8 billion over the lifetime of the contract in gross wages, accelerated wage progression and cost of living adjustments.

The labor agreement is expected to have a cost effect of about $900 per vehicle by 2028, Ford said.

Write to Dean Seal at [e-mail]

(END) Dow Jones Newswires

November 30, 2023 07:22 ET (12:22 GMT)

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