On September 8, 2022, Ford Motor Company produced the electric F-150 Lightning on the production line at the Rouge Electric Vehicle Center in Dearborn, Michigan.
Jeff Kowalski | AFP | Getty Images
shares Ford The company reported lower-than-expected profit on Friday and said demand for its electric vehicles was lower than expected, sending its shares sharply lower.
As of mid-morning, the stock was down about 9%.
Ford reported third-quarter results after the market closed Thursday, but the results fell short of Wall Street expectations. Ford’s revenue and profit fell short of analysts’ expectations, which executives attributed to lost production due to the United Auto Workers’ decision to strike at three of Ford’s main U.S. plants, including a key truck plant in Kentucky.
Results contrast sharply with competitors General MotorsGeneral Motors’ third-quarter report on Tuesday handily beat Wall Street’s forecasts on both revenue and profit.
On Wednesday night, Ford became the first of Detroit’s Big Three automakers to reach a tentative agreement with the United Auto Workers union. It won a surprising concession that should help its fourth-quarter results: Striking workers will return to work before the new deal is formally ratified.
But Ford’s new contract will be an expensive one. If the UAW deal is approved by members, it would increase the cost of each vehicle assembled in the U.S. by $850 to $900, Finance Minister John Lawler said, giving CEO Jim Farley continued efforts to Improving Ford’s cost and quality creates additional pressure.
Ford also said it plans to delay a previously announced spending of about $12 billion on electric vehicle manufacturing capacity, saying its North American customers are no longer willing to pay a premium for electric vehicles compared with comparable internal combustion engine or hybrid vehicles.
While executives have stressed that Ford will not cut or delay plans to develop a range of more advanced electric vehicles, investors worried about the company’s competitiveness with Tesla and other new entrants to electric vehicles have new reason to be cautious.
Ford also withdrew its previous financial guidance for 2023 due to the pending deal with the UAW.
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