A six-week United Auto Workers strike at Ford cut sales by about 100,000 vehicles for the year and cost the company $1.7 billion in lost profits, the automaker said Nov. 30.My experience with these so called "losses" oftentimes boils down to this.
A company projects next years widget sales of 650,000 units up from 575,000. They sell 600,000 units, up 50,000 from the year before. They missed their forecast of 650,000 so they call that a loss of let's say $500 million.
I seriously doubt Ford lost $1.7B. Maybe, but companies have been known to get creative with numbers. It doesn't mean they're not going to raise prices.
Additional labor costs from the four-year and eight-month labor agreement that was ultimately reached will total $8.8 billion by the end of the contract, translating to about $900 per vehicle by 2028, Chief Financial Officer John Lawler said in a company release. Ford will work to offset that cost through higher productivity and reduced expenses, Lawler said.
The 1.7 billion spread out over next years projected sales would be about $400 per car. Added labor costs about $200. $600 is too big a hit so they'll probably spread the 1.7b loss over 4 years so next years car will only go up $300. At the end of year 4 and in the future that $100 hit will stay and Ford will make more $ than before the strike.