Nov. 30 (UPI) — Ford said Thursday the United Auto Workers strike cost the company $1.7 billion in lost profits as it reported before-tax, full-year 2023 earnings expectations of $10 billion to $10.5 billion.
Ford said in a statement Thursday that, “The new U.S. labor agreement with the UAW is expected to cost $8.8 billion over the life of the contract, with gross wages, accelerated wage progression and cost of living adjustments representing the largest three elements of that total.”
According to Ford CFO John Lawler, the total cost of the UAW contract will be roughly $900 per vehicle by 2028.
The loss during the strike came primarily from production interruptions of high-profit-margin trucks and SUVs that cut total units produced by about 100,000.
Ford had withdrawn financial guidance projections in late October during the strike but has reinstated it.
Lawler was expected to tout the company’s Ford+ plan at Thursday’s Barclays Global Automotive and Mobility Tech Conference. It’s an effort to position Ford at the intersection of hardware, software and services as the auto industry evolves, according to Ford.
“This industry is going through the biggest technology-led transformation we’ve ever seen and some companies, new and old, are going to be left behind,” Lawler said in a statement ahead of the conference. “Ford+ is the right strategy to win — we’ve got a highly talented team that allocates capital with great discipline, so that we’re executing with consistency, generating strong growth and profitability, and are less cyclical.”
Ford reached an agreement with the UAW Oct. 25 that ended the strike after 40 days as both the union and the company acknowledged it was an historic agreement.
That deal provided a 25% general wage increase over four years. Ford workers got an immediate 11% wage hike when they ratified the new labor contract.
The top Ford UAW autoworker wage went up by more than 30% to $40 an hour. The starting wage rate was raised by 68% to $28 an hour.
On Wednesday GM reported the UAW strike cost $1.1 billion, but said it expected very strong profits in 2023 even after its union workers won major improvements in wages, cost-of-living adjustments and other gains.