Ford’s losses from union strike amounted to $1.3 billion – Kommersant

The strike by workers at Ford Motor factories cost the company $1.3 billion, Ford CFO John Lawler said during a telephone conference with investors. He said the company was losing about $400 million a week during the strike, which lasted 41 days. During the same time, Ford’s capitalization decreased by $4.32 billion, reports Reuters. Because of the strike, 80 thousand cars were not collected.

The preliminary agreement with the United Auto Workers Union was signed last Wednesday, October 25th. It has yet to be ratified, and Ford’s chief financial officer noted there is some “uncertainty” surrounding that ratification. He did not indicate the total amount it would cost the company to comply with the union agreement, but said the agreement would increase labor costs by $850 to $900 per vehicle and reduce profitability by 0.6 to 0.7 percentage points.

Introducing yesterday’s financial results the company’s third quarter, John Lawler noted that for this period the costs of the strike amounted to $100 million. As a result, the company received a net profit of $1.2 billion, while a year earlier in the third quarter Ford Motor had a loss of $827 million. Revenue increased by 11%, to $44 billion, EBIT rose to $2.2 billion. However, most of the strike occurred at the beginning of the fourth quarter. Therefore, the company withdrew previously made forecasts for the full financial year. Ford shares fell nearly 4% at the close of trading Thursday and were down nearly 6% in after-hours trading.

Alena Miklashevskaya