Ford Motor Co. (F) has reinstated its 2023 guidance after pulling its forecast last month due to the financial impacts of the labour strike by the United Auto Workers (UAW) union.
The new guidance at Ford calls for $10 billion U.S. to $10.50 billion U.S. in earnings and free cash flow of between $5 billion U.S. and $5.50 billion U.S. for this year.
That compares to previous guidance of $11 billion U.S. to $12 billion U.S. in profits and free cash flow of $6.50 billion U.S. to $7 billion U.S.
Ford said that its new collective agreement with the UAW is expected to cost its $8.80 billion U.S. over the life of the contract, which expires in April 2028.
The new UAW labour agreement includes at least 25% hourly pay raises, the reinstatement of cost-of-living adjustments, and enhanced profit-sharing payments for workers.
The Detroit automaker added that the six-week strike carried out by the UAW cost it $1.30 billion U.S. in lost production of about 80,000 vehicles.
As a result, Ford has postponed $12 billion U.S. in investments it had earmarked for its fleet of electric vehicles.
The reinstatement of Ford’s guidance comes a day after rival automaker General Motors (GM) reinstated its guidance and raised its quarterly dividend by 33%.
Ford’s stock has declined 9% this year and is currently trading at $10.59 U.S. per share.