Ford Motor has registered slight decline of 0.5% in US new vehicle sales for November at 145,559 units as compared with 146,364 units sold in the corresponding month a year ago. Sales of its trucks slipped 2.8% last month to 78,971 units from a year earlier, while its hybrid vehicle sales rose 75.2% to 12,108 units. The company saw a major uptick in the sales of its electric vehicles such as F-150 Lightning pickup truck and Mustang Mach-E, which soared 43.2% to 8,958 units from a year earlier.
UAW Union deal
The company’s October sales also fell 5.3% facing over month-long strike by the factory workers, even though analysts had said the Detroit Three automakers had built up inventory in anticipation of the strike. The company reached a deal with the United Auto Workers (UAW) union in late October, ending the strike, which the company said will cost it USD 1.7 billion. About USD 900 will be added in labor costs per vehicle by 2028.
In November, the company said that all its affected plants had been restarted, a month after Chief Financial Officer John Lawler said restarting the plants would be complicated after the deal, which UAW workers ratified in November. The 64% ratification solidified agreements until April 2028. Highlights of the contract include a 25% base wage increase, pushing the top wage up by 33% to over USD 42 per hour, and improved conditions for temporary workers.
Cutting full-year profit forecast
At the time of the ratification, Ford CEO Jim Farley stressed the need for enhanced productivity, affirming the company’s path to full production schedules. According to Farley, “the reality is that this labour agreement added significant cost, and we are going to have to work very hard on productivity and efficiency to become more competitive.” The company cut its full-year profit forecast due to lost production from the lengthy strike at its US plants.