Ford (NYSE:F) reinstated its financial outlook for 2023, forecasting an adjusted EBIT (Earnings Before Interest and Taxes) to be between $10.0 billion and $10.5 billion. Following this announcement, the company’s shares saw a modest decline intra-day today.

The car manufacturer also revealed that its recent labor agreement with the United Auto Workers (UAW) in the U.S. is expected to bring about expenses totaling $8.8 billion over the contract’s duration.

John Lawler, Ford’s Chief Financial Officer, commented on the situation, noting the significant technological changes sweeping through the industry. He emphasized that some companies, both new and established, might not keep pace with these changes. Lawler affirmed the effectiveness of Ford’s strategy, Ford+, highlighting the company’s skilled team, disciplined capital allocation, consistent execution, and reduced cyclicality in growth and profitability.

The major cost drivers in the labor agreement are gross wages, expedited wage progression, and cost-of-living adjustments. By 2028, these factors are anticipated to add approximately $900 to the cost of each vehicle.

Ford had previously withdrawn its financial guidance for 2023 in late October due to a UAW strike affecting some of its operations in the U.S.
For 2023, Ford is targeting an adjusted free cash flow in the range of $5.0 billion to $5.5 billion.

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