Ford Expects Higher Per-Car Costs than GM from UAW Deals

Like their peers at GM, Lawler and Ford CEO Jim Farley have been reining in spending on electric vehicles of late: A month ago, they said they will push out $12 billion worth of investments in auto and battery plants. And they, too, are pushing to simplify design and manufacturing processes to help absorb the higher labor costs they knew would be coming their way.

“Now it’s our job to go off and drive productivity and efficiencies,” Lawler said. “And we need to do that by reducing the number of hours it takes to build a vehicle, simplifying designs and reducing complexity as well as driving increased efficiencies through our factories.”

One factor from the UAW negotiations that Lawler said will help in those efforts: Ford now has more flexibility to, in consultation with the union, rebalance production lines in its U.S plants.

One of the bright spots in Ford’s business, Lawler told Barclays analyst Dan Levy: The order books for its Ford Pro suite of commercial vehicles are “beyond our production capacity today” and that division—which posted a Q3 EBIT margin of 12% and has produced $5.4 billion in operating profits year to date—looks set to have a very strong 2024.

“The IRA, the CHIPS Act, et cetera, [are] driving a tremendous amount of demand,” Lawler said. “Commercial customers have been underserved for a number of years.”

Shares of Ford (Ticker: F) fell about 3% to $10.26 Nov. 30—another notable discrepancy to investors’ reaction to GM’s similar news earlier this week, which included word of a dividend hike and $10 billion share buyback plan. Over the past six months, Ford shares have lost about 20% of their value, trimming the company’s market capitalization to about $41 billion.