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Ford Reports $1.7B Loss Due to UAW Strike, Expects $8.8B Cost from New Labor Agreement

The automaker reinstates 2023 guidance with lower earnings expectations, plans to offset labor costs through productivity and expense reduction.

Overview

  • Ford Motor Company has reported a loss of $1.7 billion in profits due to a six-week United Auto Workers (UAW) strike, which also resulted in a reduction of about 100,000 vehicle sales.
  • The new UAW labor agreement is expected to cost Ford $8.8 billion over the life of the contract, which ends in April 2028, adding about $900 in costs per assembled vehicle.
  • Ford has reinstated its 2023 guidance, now expecting to earn $10 billion to $10.5 billion before taxes, down from the previously projected $11 billion to $12 billion.
  • The company plans to offset the additional costs of the UAW agreement through higher productivity and reducing expenses.
  • Ford's shares fell over 1% following the reinstatement of the 2023 guidance.