Bivash
Ford Motor announced a $1.7 billion profit hit and significant vehicle production losses due to the U.S. auto workers' strike, leading to a revised full-year earnings forecast.
The strike affected Ford's adjusted earnings before interest and taxes (EBIT) for 2023,
now expected to be $10 billion to $10.5 billion, down from the previous forecast of $11 billion to $12 billion.
The outlook includes $1.6 billion in lost profits in Q4 due to disruptions in high-margin truck and SUV production.
Ford's shares rose by 1.9% in premarket trading.
The strike led to a $1.7 billion profit hit and production losses for Ford, impacting its financial performance for the year.
Ford adjusted its 2023 adjusted EBIT forecast to $10 billion to $10.5 billion, down from the previous forecast of $11 billion to $12 billion.
The strike caused disruptions in the production of high-margin trucks and SUVs, contributing to the lost profits in Q4.
Despite the revised forecast, Ford's shares increased by 1.9% in premarket trading.
This announcement follows General Motors (GM) cutting its 2023 profit forecast and revealing that new labor deals will cost $9.3 billion through 2028.
Ford was the first of Detroit's Big Three automakers to reach a labor deal with the UAW after weeks of strikes by around 45,000 workers, demanding better wages and benefits.
UAW's bargaining with automakers, including live-streamed updates by union chief Shawn Fain, became a social media spectacle, highlighting progress or deadlocks in negotiations.
The UAW-approved deal includes a pay hike of at least 30% for full-time workers, increased pay for others, $8.1 billion in manufacturing investments, and the removal of cost-saving provisions.
In addition to strike-related losses, Ford is dealing with challenges such as losses in its EV business, softening consumer demand, higher interest rates, and a competitive market led by Tesla.
Ford announced a $12 billion reduction in future EV investment plans, along with adjustments to capital investment, capacity, and job plans.