Jan. 28--Ford will pay a record $8,800 in profit sharing to its 47,000 UAW workers based on North American profits after the automaker reported global earnings of $3 billion for the last three months of 2013.
Ford reported $3 billion in net income for the fourth quarter nearly doubling the year-earlier $1.6 billion and exceeding Wall Street's expectations.
Ford earned $7.2 billion for all of 2013, up from 5.7 billion in 2012, and nearly all of it came from North America. The figure includes $2.1 billion in extra assets as part of an accounting change to defer tax assets today in order to reduce taxes in the future.
The fourth-quarter results came on almost $38 billion in revenue. Among the quarter's costs was $155 million to complete the U.S. salaried retiree voluntary lump sum program.
Restructuring continues in Europe where Ford lost $571 million and spent $156 million to close some plants. For the full year, Ford lost $1.6 billion in Europe, $144 million less than it lost in 2012 on the continent. Ford expects to lose money in Europe again this year, but the amount should continue to shrink, said Chief Financial Officer Bob Shanks.
In South America Ford lost $126 million in the fourth quarter.
The company made $106 million in the fourth quarter before taxes in Asia Pacific, which includes China, the world's largest car market where Ford now holds a 4.4% market share as it continues to expand plants and offer new models.
But North America is the profit engine. The company earned $1.7 billion in the fourth quarter, and $8.8 billion for the full year in its home region. The latter figure is used to determine the amount of the profit sharing checks to be paid March 13.
Ford will also give salaried workers bonuses this year as well as merit pay increases, subject to board approval.
Last year UAW workers received up to $8,300 in profit sharing.
The payout -- which has largely replaced raises for auto workers in the past decade -- will pump more than $400 million into the economy in the form of spending and taxes. Almost half will stay here in Michigan where Ford has about 21,000 employees.
Profit sharing was introduced in 1983, but there were years when the automakers did not earn enough to trigger payouts.
GM paid 49,000 workers up to $6,750 each last year and will announce this year's payout on Feb. 6 for its 51,500 hourly eligible hourly workers.
Last year about 31,000 Chrysler workers received up to $2,250. Today's workforce of about 32,000 will learn their amount of the profits tomorrow when Fiat-Chrysler reports its earnings. Chrysler has a different formula than GM and Ford.
Ford last month warned investors that profits would slip this year as it gears up to launch 23 new or update models worldwide, including 16 in the U.S. They include the aluminum-body 2015 F-150, a new Mustang and the next-generation Edge crossover.
In 2013, the Dearborn Truck plant was down for three weeks and Kansas City was down for two weeks.
The two truck plants that make the F-150 were down for five weeks in 2013 but the real work gets going this year with 13 weeks of downtime planned to retool. The Dearborn Truck Plant as well as Kansas City plant have collectively been down for three weeks already this quarter with 10 more weeks downtime to go. That means about 10 more weeks of shutdown at Dearborn Truck which is the lead plant and will launch the truck at the end of the year.
The staggered launch means Kansas City does not go into production with the 2015 model until next year so it will be down two more weeks this year and then have more shutdowns next year to prepare. Downtime includes the usual three-week summer shutdown, but the extra time is needed because the 2015 F-150 will switch to an aluminum body which requires a complete revamping of the body shop to work with the new material.
Ford also expects increased competition to affect pricing of vehicles this year. In the fourth quarter, Ford reported negative pricing in North America for the first time in any quarter in five years.
The automaker also improved its pension status, reducing the underfunded portion by $10 billion which was $1 billion more than expected.
Contact Alisa Priddle: 313-222-5394 or firstname.lastname@example.org. Follow her on Twitter @AlisaPriddle
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Original headline: Ford reports $3 billion in 4Q; will pay record $8,800 in profit sharing
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