Ford: Strike cost company $1.7B in lost profits

DETROIT — A six-week United Auto Workers strike at Ford cut sales by about 100,000 vehicles and cost the company $1.7 billion in lost profits this year, the automaker said Thursday.

Additional labor costs from the four-year and eight-month agreement will total $8.8 billion by the end of the contract, translating to about $900 per vehicle by 2028, Chief Financial Officer John Lawler said in a company release. Ford will work to offset that cost through higher productivity and reducing expenses, Lawler said.

The Dearborn, Michigan, automaker now expects to earn $10 billion to $10.5 billion before taxes in 2023. That’s down from $11 billion to $12 billion that it projected last summer.

Ford said the strike caused it to lose production of high-profit trucks and SUVs. UAW workers shut down the company’s largest and most profitable factory in Louisville, Kentucky, which makes big SUVs and heavy-duty pickup trucks.

The UAW strike began Sept. 15, targeting assembly plants and other facilities at Ford, General Motors and Jeep maker Stellantis. The strike ended Oct. 25 at Ford.

Ford, as well as rivals General Motors and Jeep maker Stellantis, agreed to new contracts with the UAW that raise top assembly plant worker pay by about 33% by the time the deals expire in April of 2028. The new contracts also ended some lower tiers of wages, gave raises to temporary workers and shortened the time it takes for full-time workers to reach the top pay scale.

UAW President Shawn Fain said during the strike that labor costs are only 4% to 5% of a vehicle’s costs, and that the companies were making billions and could afford to pay workers more.

At the Barclays Global Automotive and Mobility Technology Conference Thursday in New York, Lawler was asked whether Ford would consider something like GM’s $10 billion stock buyback program, which the company announced Wednesday.

Lawler said Ford plans to return 40% to 50% of its free cash flow to shareholders, on top of the current 15-cent per-share dividend.