NEW YORK – Ford Motor on Thursday reinstated 2023 guidance after pulling its forecast last month due to the impacts of labor strikes and negotiations with the United Auto Workers union.
The guidance calls for $10 billion to $10.5 billion in adjusted earnings before interest and taxes, or EBIT, and adjusted free cash flow of between $5 billion and $5.5 billion. That compares to its previously announced guidance of adjusted-EBIT of between $11 billion and $12 billion and adjusted free cash flow of $6.5 billion to $7 billion.
Ford said the new UAW labor agreement is expected to cost $8.8 billion over the life of the contract, which expires in April 2028. Crosstown rival General Motors on Wednesday a $9.3 billion impact over the length of the agreement.
Prior to the UAW strikes, which ended after roughly six weeks, Ford was “poised” to hit its guidance, Chief Financial Officer John Lawler said Oct. 26 during the company’s third-quarter earnings report.
At that time, Lawler said the UAW strike had already cost the company $1.3 billion in earnings due to lost production of about 80,000 vehicles, including roughly $100 million during the third quarter. On Thursday the company updated that impact amount to $1.7 billion, including $1.6 billion in the fourth quarter.
Ford further confirmed on Thursday that the UAW deal is expected to add about $900 in costs per assembled vehicle by 2028. Lawler previously said Ford would work to “find productivity and efficiencies and cost reductions throughout the company” to offset the additional costs and deliver on previously announced profitability targets.
The company said it plans to cancel or postpone $12 billion in investments related to electric vehicles.
“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,” Lawler said in a statement Thursday, citing the company’s Ford+ turnaround plan.
Lawler is…
Read the full article here
Leave a Reply