Efficiency should offset labour costs

Article Excerpt

FORD MOTOR CO. $10 is still a hold. The automaker (New York symbol F; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 3.9 billion; Market cap: $39.0 billion; Price-to-sales ratio: 0.2; Dividend yield: 6.0%; TSINetwork Rating: Extra Risk; www.ford.com) reported that its revenue (excluding the financing business) rose 10.7% in the third quarter of 2023, to $41.18 billion from $37.21 billion a year earlier. That’s largely due to higher demand for its pickup trucks and SUVs. Earnings before unusual items also jumped 30.0%, to $0.39 from $0.30. The company recently agreed to a new contract with its U.S. unionized workers. It estimates the six-week strike cut its gross profits by about $1.3 billion. Moreover, the new 4.5-year contract will increase its labour costs by 25%. That will add between $850 and $900 to the cost of each vehicle. Ford aims to offset those costs with better efficiency and productivity. Ford Motor remains a hold. hold. …