Last fall Ford agreed to a big raise for striking members of the United Auto Workers union. On Tuesday, they gave their shareholders an even bigger raise.
The company announced it would give shareholders a second, supplemental dividend that will more than double the regular dividend they usually receive. The regular dividend is 15 cents a share. The special dividend is 18 cents a share.
Ford reported reduced earnings in the fourth quarter due to the cost of the strike that started in the final two weeks of the third quarter and ran through most of October. The company said its adjusted earnings came in at $1.2 billion, down from $2.1 billion at the end of 2022.
Even with the drop in fourth-quarter earnings, full-year earnings at Ford rose to $8.1 billion from $7.6 billion for 2022. And that means the average profit sharing check for the 58,000 UAW members at Ford will be $10,416, up from $9,176 a year earlier.
But it said that it expects adjusted earnings before interest and taxes in 2024 of between $10 billion to $12 billion. The high end of that range would reflect record profits by that measure for the company, said Ford CFO John Lawler.
“We are no where near our earnings potential for Ford Motor,” CEO Jim Farley told investors Tuesday evening.
The company had said during the strike that it couldn’t afford the demands the United Auto Workers union was making, with Farley even arguing that meeting the union demands would cause Ford to go bankrupt.
While the union didn’t get everything in its list of demands at the start of the strike, it did win an immediate pay increases of at least 11% for its members at the company, and 14 percentage points of additional guaranteed pay hikes during the 4-1/2 year life of the contract. It also granted workers a cost-of-living adjustment to pay to protect them from the effect of higher prices.
Ford is the second automaker to increase payouts to shareholders since reaching the deal with the UAW. In November, GM announced a $10 billion share buyback and 33% dividend increase.
Shares of Ford gained more than 6% in after-hours trading following the earnings report, guidance and news of the dividend.
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