Ford Motor reinstated its 2023 guidance and detailed how much it expects the recently ratified United Auto Workers contract to cost the company.
According to a business update Thursday, Ford adjusted earnings before interest and taxes from its original guidance of $12 billion down to $10 billion. It also announced an adjusted free cash flow of $5.5 billion.
Ford also offered insight into how much the UAW contract will cost the company: $8.8 billion by the time it expires in 2028.
The company is likely still reeling from the recently concluded United Auto Workers strike. According to Thursday’s estimate, the walkout, which began in September, cost the company $1.7 billion.
The cost of the strike and the contract will be passed onto consumers in some way. Ford said it expects to add $900 to each of its vehicles in 2024.
Ford’s estimates come as the auto industry begins adjusting to UAW’s contracts. This week, General Motors announced its cost estimates and reinstated its 2023 guidance. GM expects the contract to cost the company $9.1 billion and said vehicle prices will rise next year.
The final of the big three carmakers entangled in the strike, Chrysler parent Stellantis, has not announced its cost expectations.
The UAW contracts, ratified at all three companies in November, provide massive wage and benefit increases to all unionized workers.