By most accounts, Ford enjoyed a pretty successful 2023, ending the year on a high note by setting its own personal EV sales record and also posting an overall sales increase in Q4 to boot. However, as Ford Authority previously reported, a six-week-long strike by the United Auto Workers (UAW) ended with a new agreement that Ford says cut a whopping $1.3 billion of its bottom line, thanks to a multitude of investments, pay increases, and even lump sum retirement offers. Even though FoMoCo previously stated that it plans to cover those costs by reducing inefficiencies in its operations, the automaker is now warning that it will take a rather substantial hit to its Q4 2023 finances anyway, according to Reuters.
Ford announced that it expects to record a pre-tax re-measurement loss of about $1.7 billion in the last quarter of the year, losses it’s blaming on post-retirement benefits and employee pensions, specifically. On an after-tax basis, this loss is expected to lower the automaker’s net income by around $1.3 billion, as previously stated.
The Blue Oval is also pointing to lower discount rates from a year ago as a contributing factor to this loss, which was discovered after a measurement loss, or something that occurs after a company reevaluates the value of its foreign currencies or long-term assets.
Following the conclusion of the UAW strike – which halted production at multiple Blue Oval facilities for weeks – Ford CFO John Lawler said that “the strike had an EBIT impact of roughly $100 million. And so far, the strike has trimmed about 80,000 units from our plan. This would reduce 2023 EBIT by roughly $1.3 billion” – a loss that clearly carried over into the end of the year, even though the strike officially ended in late October.