Ford profit triggers record $9,300 UAW worker bonuses

January 28 23:40 2016

Ford Motor (F) reported a strong fourth-quarter and full-year profit, enough to trigger record $9,300 profit-sharing checks for about 52,700 hourly workers. The automaker on Thursday reported net income of $1.9 billion in the fourth quarter and $7.4 billion for the year. Revenue was $40.3 billion for the quarter and $149.6 billion for the year. Pre-tax profit in the final three months was $2.6 billion, contributing to $10.8 billion for the year. The company made money in every region except South America, with new records in North America and Asia Pacific. Europe is back in the black for the first time since 2011.127575-10-ford-motor-company

“We promised a breakthrough year in 2015 and we delivered,” Ford CEO Mark Fields said in a statement. The results were not surprising as Fields announced earlier this month that an accounting change that reduces pensions costs would result in higher earnings than expected, which would trigger larger profit-sharing checks. The key figure for autoworkers is the $9.3 billion pre-tax profit earned in North America because the profit-sharing formula, negotiated with the United Auto Workers union, awards $1 for each $1 million in North American profit. That makes it $9,300 for eligible employees, before taxes, compared with checks up to $6,900 earned in 2014. The previous record amount was $8,800 based on 2013 results.

Upon ratification of the new UAW contract in the fall, Ford gave workers a $1,500 pre-payment. They will get the remaining $7,800 in mid-March. Chief Financial Officer Bob Shanks said Ford put $600 million in charges on the books in the quarter to cover the extra costs associated with the new contract. The Ford UAW payout is more than double the $4,000 in profit sharing that workers at Fiat Chrysler Automobiles will receive Feb. 19. The financial results beat Wall Street estimates for the quarter as well as the full year.

But even though Ford is fresh off its best sales year since 2000 and is working to reinvent itself as a technology company as well as an automaker, its stock has fallen about 20% over the last year and is down roughly that amount so far in 2016. Earlier this month Morgan Stanley analyst Adam Jonas told a Detroit audience that he advises investors to sell Ford shares and said there is little love for the automaker on Wall Street because there is not a positive future for traditional car companies in today’s world, where ride-sharing and autonomous driving will play key roles.