After roughly six weeks, the United Auto Workers (UAW) strike against Ford officially ended late Wednesday night after the two sides reached a tentative agreement, which must still be ratified by members – a process that’s expected to begin Sunday night. Regardless, it seems as if The Blue Oval can now put this targeted shutdown behind it, though the financial implications of seeing three plants – which impacted production at over a dozen other facilities as well – figure to continue for the foreseeable future, as Ford CFO John Lawler revealed during the automaker’s Q3 earnings call this week.
“Now to provide some context, in the third quarter, the strike had an EBIT impact of roughly $100 million,” Lawler said. “And so far, the strike has trimmed about 80,000 units from our plan. This would reduce 2023 EBIT by roughly $1.3 billion.” Additionally, because of the UAW strike, FoMoCo noted that it is pulling its 2023 guidance, which seems destined to receive some revisions following the weeks-long production shutdown.
Following its last counterproposal to the UAW – which offered a 23 percent wage increase over the life of the contract – the union was reportedly asking for 25 percent, along with other concessions. At the moment, neither side has revealed the full terms of the new tentative deal, though we do know that it includes the proposed 25 percent general wage increase, along with the end of wage tiers at select plants, the return of cost-of-living adjustments, and will result in the lowest-paid temp workers receiving raises of around 150 percent over the course of the contract, with top pay occurring after three years of employment.
As for Ford’s Detroit Big Three counterparts – General Motors and Stellantis – both of those companies reportedly remain engaged in “active” discussions with the union as each wants to hammer out a new contract as quickly as possible following Ford’s agreement. The biggest holdups at the moment pertain to wage grow-in periods, with GM aiming for three years for existing employees and four years for new hires, while Stellantis was offering a four year term for employees to reach the top of the pay scale.
We’ll have more on Ford’s new agreement with the UAW soon, so be sure and subscribe to Ford Authority for the latest Ford-UAW news, UAW news, and 24/7 Ford news coverage.
Comments
Are those actual costs or is it merely an estimate of lost sales, not involving money. Don’t shed any tears until we know which it is. I bet the latter.
Don’t worry, there will be no money lost as the price of a vehicle will start to creep up. Which should make Toyota and Honda feel a lot better about the price of their vehicles
Big three doubled the price of ALL of their vehicles, while cutting quality over the years. Treated workers disrespectfully by taking in record profits and not competing the workers. Ford would be nowhere without workers like my father who sacrificed his lifespan by working for ford in the old days.
Ford would be nowhere? So how did Toyota, Honda, and Tesla do it?
Toyota & Honda, and all Japanese auto makers have their R&D paid for by the Japanese government.
Tesla wouldn’t exist without Government alternative fuel vehicle grants and loans guaranteed by the Government.
Need to concentrate on vehicles that customers want like the Affordable Maverick Pickup and not what Governments wants. Listen to you Customers.
But I bet Farley’s pay and bonuses won’t be affected, as well as our 52 Vice Presidents we pay to dilute the blame for recalls that can’t be satisfied!