Detroit Free Press
2:15 pm EST January 24, 2019
While hourly workers employed by Ford Motor Co. on average will receive a check of $ 7,600 to share profits in March, the dollar amount would have been even higher if it were not for President Donald Trump's rates.
During a discussion with badysts about Ford's annual earnings report in 2018, Chief Financial Officer Bob Shanks revealed on Wednesday that the automaker absorbed about $ 750 million in fare costs.
Trump, in trying to boost China, Mexico and Canada to better trade agreements, imposed tariffs of 25 percent on steel and 10 percent on aluminum last year. Ford had to pay those costs to import materials to build vehicles.
"Rates are something we will continue to observe" when evaluating Ford's future finances, Shanks said.
Workers of the United Automobile Workers (UAW), which negotiate profit sharing as part of contracts negotiated every four years, will also be watching.
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Workers at the Ford factory will see how their profit-sharing checks increase slightly from $ 7,500 to $ 7,600 for work done last year, but the controls would have been 10 percent higher if it were not for the rates.
This is because workers at the Ford factory receive an average of $ 1,000 for every $ 1 billion in company profits in North America, where most of Ford's profits are earned. So, if Ford spent around $ 750 million in tariff costs, as the company said on Wednesday, workers earned an average of $ 750.
Ford employs about 56,000 workers per hour, and not all qualify for profit sharing.
Other costs hit Ford
In addition to the rates, Ford also noted its unexpected $ 1.1 billion increase in steel and aluminum costs.
"This is due to tariffs of 25 percent for steel and 10 percent for aluminum because US producers raised prices exactly that amount as soon as importers did," said Jon Gabrielsen, a market economist He specializes in manufacturing.
"Ironically, the rates that are supposed to protect workers reduced the profit sharing for workers by about $ 750 – $ 1,850 per worker, would have been about $ 8,350- $ 9,450 each without the cost of the components and metals for Ford's profits. "
Ford spokeswoman Karen Hampton declined to comment on the tariff impact on workers.
She confirmed that tariffs, higher commodity costs and Takata airbags reduced the automaker's earnings in North America by $ 1.9 billion in 2018. That translates into a reduction of $ 1,900 in checks from participation in the profits for the members of the UAW, recognized Hampton.
Performance-based compensation is designed to unite everyone to have a hand in the health of the company. UAW workers began qualifying for profit-sharing checks in 1982 with the first payment in 1983, union spokesman Brian Rothenberg said.
View of the union
In the past, UAW leaders have expressed support for a specific focus on tariffs that focus on countries that are flooding the US market with products or causing an economic disruption.
John Nbadar, legislative director of the UAW, testified before the Senate Finance Committee of the United States Senate and also presented a statement dated September 28, 2018 on the tariff impact on the United States auto industry.
"Our goal is to create well-paid jobs in the United States now and in the future," the statement said. "We proudly endorse policies that strengthen the middle clbad, create high-paying jobs that provide benefits and retirement security in the United States, and reduce income inequality both here and abroad. You need a vibrant middle clbad to have a strong economy and democracy. "
UAW member Jim Celmer, who works at the Livonia transmission facility in Livonia, Michigan, said Thursday: "Do not get me wrong, bigger is always better." But a couple of years ago we did a stretch without receiving anything, and a couple of years with very small checks, so this is a good check. "
He added: "With regard to the rates that affect our controls, that is the product of Trump's ideas, I am not a fan of sharing my political beliefs, so I will stay away from that question. in different ways. "
Contact Phoebe Wall Howard: email@example.com or 313-222-6512. Follow her on Twitter @phoebesaid
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