Ford net income down while employees reap profit sharing checks
Earnings for Ford in 2014 were less than half of 2013’s numbers, reports Alisa Priddle from Michigan.com, a drop from $7.2 billion to $3.2 billion. The decrease is largely attributed to the high cost of recalls in the last year amounting to $900 million. Recall and warranty repair also damped the otherwise good profits on the new Mustang and F-150 pickup truck models.
Ford’s UAW employees, totaling 32,662, each will receive a check averaging $6,900, a number based on pretax profits and varied by hours the employee worked. Unions bosses negotiated into the contract that employees are to receive $1 for every $1 million in profit that the company sees. Profit sharing payouts are to be distributed March 12.
The global company saw profit a profit of $6.9 billion in the North America region, from which the profit sharing bonus figure was calculated for American workers. The Asia Pacific market took in $589 million as the region continues to grow economically.
However profits were not as high as expected, says Priddle, with Wall Street expecting stock price at 29 cents, with the actual value was 26, down by 5 cents from 2013. Part of the problem is attributed to struggling markets in Europe and South America. Slow growth in the European economy led to a loss for Ford of $1.1 billion in 2014. Political and economic unrest in South America, including a dispute over currency led Ford to withdraw production entirely from Venezuela, ending up $1.2 billion in the red for that the South American region.