Ford (F) will be putting over $13 billion into a fund which the UAW will use to pay health-care costs. That will take the liability for these expenses off Ford’s balance sheet and the costs off of its P&L.
But, Ford’s sales have been down for thirteen months in a row and it controls only 15% of the US vehicle market. Toyota (TM) has as much. GM (GM) is stronger, and sales for Honda (HMC) and Nissan are rising.
Ford is hinting that things could get worse. The head of its Americas operation, Mark Fields, is quoted in The New York Times as saying. “If you look at all the indicators out there, there is more risk than opportunity,” he said referring to 2008 US car sales.
The head of the UAW, Ron Gettelfinger, said “We have no doubts or reservations about Ford’s survival," because the new contract gives Ford such a large cost break. But, the cost break means little if Ford’s US market share slips toward 10%. Then Gettelfinger may have to eat his words.
Douglas A. McIntyre
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
