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Ford profit-sharing checks: UAW hourly workers to get $6,600

Phoebe Wall Howard, Detroit Free Press on

Published in Automotive News

DETROIT -- Ford said Tuesday that its U.S. factory workers will receive $6,600 in profit-sharing checks, down $1,000 from the year before -- reflecting the company's lower profits in 2019.

A year ago, profit sharing for Ford workers averaged $7,600, which was up from $7,500 in 2017. This year's checks reflect a 13% decline.

Not all 56,000 hourly workers are eligible for the negotiated benefit; checks are expected in March.

Ford awards its UAW employees $1,000 in profit sharing for every $1 billion in North American profit before taxes. Last year, GM workers averaged a profit sharing check of $10,750 while Fiat Chrysler workers averaged $6,000. Those automakers' 2019 earnings reports come out later this week.

Tim Stone, Ford chief financial officer, said during a media briefing the company absorbed $600 million in UAW contract-related cash bonuses that are unrelated to the profit sharing checks.

Ford reported 2019 earnings before interest or taxes -- EBIT -- of $6.4 billion, down from $7 billion in 2018 and $9.6 billion in 2017. The company said it made $6.6 billion pretax in North America. North America and Ford Credit continue to be the company's only profitable units.

 

Ford blamed its financial situation last year on "operational challenges" with the Explorer SUV launch, labor contract costs and "higher warranty costs," Stone said.

The automaker's net income, or profit after taxes and other charges, was $47 million, down from $3.7 billion in 2018 and $7.7 billion in 2017. Ford revealed in January its net income would be affected by a $2.2 billion charge related to pension obligations, a bookkeeping adjustment.

Ford reported negative net income of $1.7 billion in the fourth quarter, a decrease of $1.6 billion.

Net income includes additional costs from what EBIT reflects.

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