Ford reinstates guidance – says UAW deal will cost $8.8 billion

Ford Motor Co (NYSE: F) says its recent agreement with the United Auto Workers will cost about $900 per vehicle or $8.8 billion in total. Its shares are down 1.0% at writing.

Ford’s updated guidance for full-year earnings

The legacy automaker also reinstated its full-year guidance for earnings and free cash flow on Thursday. Ford is now calling for its adjusted EBIT to fall between $10 billion to $10.5 billion in 2023.

Up until the UAW strike, the car manufacturer saw up to $12 billion of earnings before interest and taxes (adjusted) this year. Its press release reads:

Ford stock is currently down well over 30% versus its year-to-date high.

Management remains committed to Ford+ plan

On Thursday, the multinational said its free cash flow is now expected to fall between $5.0 billion and $5.5 billion in 2023 – down from its previous guidance for up to $7.0 billion.

The reinstated outlook still, however, beats the consensus of $4.26 billion. Executives at the New York-listed firm remain bullish on the “long-term potential of Ford+ plan to generate growth and value”.

Earlier in November, Ford Motor confirmed that it was downsizing its previously revealed plan of setting up a battery plan in Michigan (find out more).

The news arrives only hours after peer General Motors Co said the labour deal would push costs up by a whopping $9.3 billion but still committed billions to shareholder returns.