Ford net profit disappoints: 'We have to be far fitter'

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Ford net profit disappoints: 'We have to be far fitter' originally appeared on Autoblog on Thu, 25 Jan 2018 08:50:00 EST. Please see our terms for use of feeds.


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[simplyconnected]

"Ford's fourth-quarter results were driven almost entirely by North America, which accounted for $1.6 billion out of $1.7 billion of pre-tax profits...

Ford said its U.S. employees represented by the United Auto Workers union would receive profit-sharing payments of $7,500 each for 2017."

Does this sound like Ford is hurting? I don't think Fiat-Chrysler or GM is sharing anywhere near this amount of profit. - Dave

[Dan Leavens]

Dave " profit sharing " is another word for incentives to appease the union and the workers.

Does this sound like Ford is hurting? I don't think Fiat-Chrysler or GM is sharing anywhere near this amount of profit. - Dave

[simplyconnected]

You can look at it that way Dan, but it's also a 'contract benefit'. That means, the workers gave up something else to get it.

When they go to the table, Ford doesn't simply give up benefits for free. 'The Company' always asks, "Ok, how are we going to pay for that?" The union negotiates away some benefits for others. Sometimes the union gets stuck with the bill in a 'bad deal'.

For example, remember all those bad Firestone tires? They were made to Ford's specifications before catastrophe struck and the National Transportation Safety Board issued a recall. Who do you think paid for new tires? Franchised dealerships (non-UAW) did all the work including ordering, removal, mounting, balancing, re-assembly on the vehicle. They drilled holes in the sidewalls of the bad tires and disposed of them.

Who paid for it including labor? All that money came straight out of the worker's profit sharing money so Ford lost nothing and most folks simply assumed Ford picked up the tab. Profit sharing is based on auto sales. The UAW workers had nothing to do with faulty tires and they weren't allowed to do any of the recall work. Regardless, they paid.

Sometimes negotiators get creative like when the UAW agreed to lower wages for new hires for the first five years. Or, retirement benefits are re-negotiated. Sometimes, active workers kick in a quarter per hour to bolster the retirement fund to give retirees a $2/per day raise.

Another fund they have is the 'nickel fund' to pay for active employees to further their education. Each employee kicks in five cents per hour. This is HUGE as Ford employs 57,000 but not many work and go to school. 57,000 times 40 hrs times $0.05 = $114,000 per WEEK or $1,482,000 per semester! Ford and the UAW erected many Learning Centers with the surplus from this fund as it continues to grow.

And wouldn't you know, this money surplus also brought out the thieves who couldn't resist siphoning some for themselves:
CLICK HERE FOR, GM, Ford 'cooperating' with feds as probe into UAW training centers widens. Can't win. - Dave