Ford Stocks Plummet on Word of UAW Pact
According to the Detroit Free Press.com:
Ford Motor Co. shares are down for the second day after Wall Street continued digesting the details of the tentative 4-year contract between the automaker and the UAW.
Voting by more than 50,000 autoworkers is to conclude Monday.
Ford and the UAW reached a deal early Saturday morning after a more than 40-hour, round-the-clock bargaining session.
The deal gives the union significant factory investments, as well as commitments not to close or sell any plants beyond those already announced in Ford's Way Forward turnaround plan. The deal also gives Ford a favorable wage structure for new hires and establishes a union-managed trust for retiree health care obligations, which may remove as much as $20 billion in liabilities off Ford's balance sheet.
Since the deal was announced, Ford's share price has been falling. Shares closed Tuesday at $8.63, and are down 32 cents, or 3.6%, since Friday.
While Wall Street analysts do recognize the deal as good for Ford in the long run, some are unclear on the true savings and the long-term impact on earnings, causing them to be cautious on the stock. Ford is to disclose third-quarter financial results Thursday and is widely expected to announce deeper cost-cutting measures.
While the automaker made a profit of $468 million through the first half of this year, the company is expected to report a per-share loss of 47 cents in the third quarter and to end the year in the red, according to a consensus of estimates listed on Thomson One Analytics...click to continue.
