2013 Profit Sharing

[SheetMetalJoe]

I had a feeling we were going to get screwed somewhere in PS for this year...

 

FNA (thru Q3 2013) profit: $7.079 Billion

Special Items: $1.257 Billion

 

Net EBIT: $5.822 Billion

 

Thanks to those special items (of which most [~700M] are related to Europe, but we get charged for), we're so far losing $1,257 off of an average check of $7,079. Too bad the reps who thought of this "ingenious" profit sharing program didn't think to exclude the special items of the one money-losing market Ford is still doing business in.

 

Don't think Europe's woes apply to us? Think again. Page 86 of Volume III (SUB/Profit Share agreement) specifically states they exclude special items from FNA EBIT, regardless of market.

 

We still have one quarter to go, but don't look for this year's check to be bigger than last year's - it'll be about the same, if not a little less. Still (depending on 4Q results), expect the per-hour profit share to be about $3.4245/hour. On 2080 hours, this equals about $7,122.96.

 

If you want a quick way to figure your hours (instead of going thru all of your paystubs), go to Labor. They have this information at the ready for everyone and it won't take but 2 minutes for them to pull it up.

I think that you are mistaken... Or maybe I am... You contradicted yourself in your post. First you said "Too bad the reps who thought of this "ingenious" profit sharing program didn't think to exclude the special items". Then you said "Page 86 of Volume III (SUB/Profit Share agreement) specifically states they exclude special items from FNA EBIT". The key word in each statement is EXCLUDE. So the company does exclude special items when calculating our profit share, and the reps DID bargain to have special items excluded. Our profit sharing is only calculated from North American profits, pre-tax, Excluding special charges. So to get a ballpark figure of your profit sharing, you will get $100.00 per million in reported profit, or $1000.00 per billion in profit. It appears that Ford of Europe has no bearing on US profit sharing. If I am getting this wrong, please explain.

[hee haw]

I think that you are mistaken... Or maybe I am... You contradicted yourself in your post. First you said "Too bad the reps who thought of this "ingenious" profit sharing program didn't think to exclude the special items". Then you said "Page 86 of Volume III (SUB/Profit Share agreement) specifically states they exclude special items from FNA EBIT". The key word in each statement is EXCLUDE. So the company does exclude special items when calculating our profit share, and the reps DID bargain to have special items excluded. Our profit sharing is only calculated from North American profits, pre-tax, Excluding special charges. So to get a ballpark figure of your profit sharing, you will get $100.00 per million in reported profit, or $1000.00 per billion in profit. It appears that Ford of Europe has no bearing on US profit sharing. If I am getting this wrong, please explain.

I think that your math is wrong, $100 per million would be $100,000 per billion. 10,000 employees would take ALL of that billion, not leaving any for rest of employees or company. Did you mean $1.00 per million?

[Ktp1989]

Why cap the profit sharing at 12 billion? If the new way of doing business is we win when the company wins...then let's win as high as we can go. The reason is that the company will be a cash cow moving forward and the IUAW cut us off at 12 billion..didn't understand it.

[qwertyuiop]

I think that you are mistaken... Or maybe I am... You contradicted yourself in your post. First you said "Too bad the reps who thought of this "ingenious" profit sharing program didn't think to exclude the special items". Then you said "Page 86 of Volume III (SUB/Profit Share agreement) specifically states they exclude special items from FNA EBIT". The key word in each statement is EXCLUDE. So the company does exclude special items when calculating our profit share, and the reps DID bargain to have special items excluded. Our profit sharing is only calculated from North American profits, pre-tax, Excluding special charges. So to get a ballpark figure of your profit sharing, you will get $100.00 per million in reported profit, or $1000.00 per billion in profit. It appears that Ford of Europe has no bearing on US profit sharing. If I am getting this wrong, please explain.

 

What I meant by this statement was this:

 

- The "Too bad" statement is worded correctly. What it means is that all company-related special items, regardless of market, are figured against our profit sharing. The statement was meant to ask why our reps did not petition the company for only special items only attributable to the North American market to be counted against our profit share earnings. As it stands right now, all special items (as of 3Q 2013, $1.257B) are counted against us, of which the majority of that figure is Europe's woes and the expansion in China/Asia Pacific, neither of which has anything to do with us.

 

- The reps did not bargain to have special items excluded from FNA EBIT - this is a company money-saving tactic. Although special items have been excluded from earnings for years, it is just now becoming more apparent as to how much this is saving the company. At $1,257 per employee, the company is saving approximately $58,450,500 by excluding the special items from our sharing. IMO, that's chump change compared to what FNA is bringing in in profits. FNA has only had appx. $125M in special items this year. Call me greedy, but I'd prefer the extra $1,100 on my profit share check were these exclusions not in place.

 

However, you are correct in saying that Europe's troubles (aside from the special items) have no impact on FNA profits. Our PS comes directly from FNA, and nowhere else. You are also correct in saying that the average profit share is $1,000 per $1B of FNA profit, provided that FNA makes $1.25B for the entire year. If that threshold is not reached, then there is no profit share for the year. It is not, however, $100 per million - it is $1 of profit share per $1M of profit.

Edited November 22, 2013 by qwertyuiop

[littlecountry]

Stop stressing over the formula!!! Just enjoy the money!

[SheetMetalJoe]

 

What I meant by this statement was this:

 

- The "Too bad" statement is worded correctly. What it means is that all company-related special items, regardless of market, are figured against our profit sharing. The statement was meant to ask why our reps did not petition the company for only special items only attributable to the North American market to be counted against our profit share earnings. As it stands right now, all special items (as of 3Q 2013, $1.257B) are counted against us, of which the majority of that figure is Europe's woes and the expansion in China/Asia Pacific, neither of which has anything to do with us.

 

- The reps did not bargain to have special items excluded from FNA EBIT - this is a company money-saving tactic. Although special items have been excluded from earnings for years, it is just now becoming more apparent as to how much this is saving the company. At $1,257 per employee, the company is saving approximately $58,450,500 by excluding the special items from our sharing. IMO, that's chump change compared to what FNA is bringing in in profits. FNA has only had appx. $125M in special items this year. Call me greedy, but I'd prefer the extra $1,100 on my profit share check were these exclusions not in place.

 

However, you are correct in saying that Europe's troubles (aside from the special items) have no impact on FNA profits. Our PS comes directly from FNA, and nowhere else. You are also correct in saying that the average profit share is $1,000 per $1B of FNA profit, provided that FNA makes $1.25B for the entire year. If that threshold is not reached, then there is no profit share for the year. It is not, however, $100 per million - it is $1 of profit share per $1M of profit.

 

I thank you for your explanation. I have read the language over and over again, and your explanation over and over again. I still can not understand how you are bringing Europe into the equation? Our profit sharing is based SOLELY on North American profits, and it EXCLUDES special charges. littlecountry, I will enjoy the money, I just thought they made this easy to calculate, and it seems that may not be the case?

[qwertyuiop]

 

I thank you for your explanation. I have read the language over and over again, and your explanation over and over again. I still can not understand how you are bringing Europe into the equation? Our profit sharing is based SOLELY on North American profits, and it EXCLUDES special charges. littlecountry, I will enjoy the money, I just thought they made this easy to calculate, and it seems that may not be the case?

 

The only reason I am bringing Europe into the equation is because of the term "Special Items". It has been reported in Ford's 2013 Financial results that, so far this year, the automotive sector of their business has taken $1.257B in special one-time charges. These charges are lumped together into one category on Ford's balance sheet.

 

If you look at the Ford 2012 Annual Report to Shareholders (http://corporate.ford.com/doc/ar2012-2012%20Annual%20Report.pdf), page 21, there is a breakdown of how the special items are figured. Had it not been for a large gain in one of the businesses Ford consolidated last year, special items would have added up to appx. $800M. Also notice, on the report, there is a section there titled "Belgium Pension Settlement". Granted, there is no charge in this category for 2012, but notice how it DOES figure into the special items for 2011. Belgium is in Europe, hence why Europe's special items are important.

 

Europe's and China/Asia-Pacific's special items (related to the automotive sector) will report here in 2013's report. This is why I am saying their special items are significantly important to us, due to the fact "special items" are not separated out by region. They may be separated in the line items of the special items table (as required by law), but as a group, they are lumped together to produce one number attributable to the company's automotive sector.

 

When it comes time to figure our profit sharing, you take the FNA EBIT figure and subtract ALL AUTOMOTIVE-RELATED SPECIAL ITEMS (again, whatever charges are lumped into this category, regardless of market). Then, after subtracting Net Interest Expense (another category where our profit share takes a hit), you come to the average amount per employee that will go into the profit share fund. This amount is significantly lower than what the papers and the media want to report.

 

Everyone last year was saying how the average check would be $8,300 before taxes. In reality, thanks to special items and NII, it was around $7,300, or $1,000 LESS than what everyone reported. I had profit sharing figured down to a nickel's difference last year ($3.6322 per hour versus the actual of $3.6844), a month and a half before a figure was even reported. No one believed me because they all thought I was crazy talking about "special items" and "net interest expense". Turns out the only thing I was off on was the employees in the Ford system, and not any of my other numbers.

 

I don't mean to sound like I'm a know-it-all when I talk about stuff like this, but I do know my numbers, figures and legalese. It's an area I strongly excel in.

[Grandmaster B]

I believe you are wrong and this is why. Look at page 20. Notice 2011 net income compared to 2012? If special items made any kind of difference in our PS we would have gotten a extra $15,000 in PS last year. Special items are normally a negative, but in this case were a positive. Ford used a tax valuation allowance(a way to manipulate earnings) for about 4 years. That let them hold on to 15 billion in automotive profits over those years without reporting it to the IRS(or any of us) until taxes were due for 2011. Fords tax valuation allowance was reported as a special item to the IRS and that is why Ford (not the UAW) negotiated Special Items from our PS in the 2011 contract. That is why NO Special Items are figured in to our PS from Europe or anywhere else. I'm not sure how you figured your PS last year, but the average WAS $8,300! I worked 2,984hrs last year at $3.6844 per hour.

[Long forker DTP FINAL]

I believe you are wrong and this is why. Look at page 20. Notice 2011 net income compared to 2012? If special items made any kind of difference in our PS we would have gotten a extra $15,000 in PS last year. Special items are normally a negative, but in this case were a positive. Ford used a tax valuation allowance(a way to manipulate earnings) for about 4 years. That let them hold on to 15 billion in automotive profits over those years without reporting it to the IRS(or any of us) until taxes were due for 2011. Fords tax valuation allowance was reported as a special item to the IRS and that is why Ford (not the UAW) negotiated Special Items from our PS in the 2011 contract. That is why NO Special Items are figured in to our PS from Europe or anywhere else. I'm not sure how you figured your PS last year, but the average WAS $8,300! I worked 2,984hrs last year at $3.6844 per hour.

You spent way too much time at work, life is to short.

[Grandmaster B]

That's life at Sterling Axle

[qwertyuiop]

If special items made any kind of difference in our PS we would have gotten a extra $15,000 in PS last year.

 

Unfortunately, this is incorrect. Special items have been excluded from earnings since the profit sharing plan began in 1982. If you go back to 1999, when Ford completed its sale of the Associates (a banking group sold to Citi), they had a one-time gain of over $15B from that sale. That year, Ford made over $22B in profits. However, Profit Sharing for that year was only $8,000, due to the fact it was excluded from automotive sector profits. For 2011, the tax valuation allowance (since it was treated as an extraordinary one-time item) was not figured into our profit sharing, even though it resulted in a gain. Gain or loss, special items are excluded.

 

Any special items, extraordinary one-time items and charges related to the automotive sector of the entire business are deducted.

 

 

Ford used a tax valuation allowance(a way to manipulate earnings) for about 4 years. That let them hold on to 15 billion in automotive profits over those years without reporting it to the IRS(or any of us) until taxes were due for 2011.

 

The tax valuation allowance was used as a way of not paying income taxes on the billions of dollars Ford was losing at the time. That's part of Generally Accepted Accounting Principles (GAAP) and most major corporations use that as a way of getting out of taxes on money that, even though earned by the company, can be attributed to a loss on the company's bottom line. I'm no accountant, so I don't quite know how GAAP affects the valuation of certain of the company's financials. With how much financial data Ford reports, I don't think I'd want to, either.

 

 

I'm not sure how you figured your PS last year, but the average WAS $8,300! I worked 2,984hrs last year at $3.6844 per hour.

 

 

I figured profit sharing the same as everyone else. Most plants of the company work a 40-hour schedule, with few overtime opportunities. Rawsonville, DTP, LAP, Sterling and Van Dyke are some examples where insane OT was worked. Basing the dollar figure of $3.6844 on a 2,080 hour work year, which most people put in, the average came out to be $7,663.55. Again, even though FNA EBIT was reported as $8.3B, special items and net interest expense are deducted from this amount BEFORE the profit share fund is figured.

Edited November 26, 2013 by qwertyuiop

[Grandmaster B]

Now you know how much O.T. Everyone in every plant works?!?! Your Bullshit is almost believable.

Edited November 26, 2013 by Grandmaster B

[Long forker DTP FINAL]

 

Unfortunately, this is incorrect. Special items have been excluded from earnings since the profit sharing plan began in 1982. If you go back to 1999, when Ford completed its sale of the Associates (a banking group sold to Citi), they had a one-time gain of over $15B from that sale. That year, Ford made over $22B in profits. However, Profit Sharing for that year was only $8,000, due to the fact it was excluded from automotive sector profits. For 2011, the tax valuation allowance (since it was treated as an extraordinary one-time item) was not figured into our profit sharing, even though it resulted in a gain. Gain or loss, special items are excluded.

 

Any special items, extraordinary one-time items and charges related to the automotive sector of the entire business are deducted.

 

 

 

The tax valuation allowance was used as a way of not paying income taxes on the billions of dollars Ford was losing at the time. That's part of Generally Accepted Accounting Principles (GAAP) and most major corporations use that as a way of getting out of taxes on money that, even though earned by the company, can be attributed to a loss on the company's bottom line. I'm no accountant, so I don't quite know how GAAP affects the valuation of certain of the company's financials. With how much financial data Ford reports, I don't think I'd want to, either.

 

 

 

 

I figured profit sharing the same as everyone else. Most plants of the company work a 40-hour schedule, with few overtime opportunities. Rawsonville, DTP, LAP, Sterling and Van Dyke are some examples where insane OT was worked. Basing the dollar figure of $3.6844 on a 2,080 hour work year, which most people put in, the average came out to be $7,663.55. Again, even though FNA EBIT was reported as $8.3B, special items and net interest expense are deducted from this amount BEFORE the profit share fund is figured.

When Ford sold the Associates I got over $ 7700.00 because I had Ford stock, so if you own stock you get more than just PS.

[Die Wahrheit]

Why cap the profit sharing at 12 billion? If the new way of doing business is we win when the company wins...then let's win as high as we can go. The reason is that the company will be a cash cow moving forward and the IUAW cut us off at 12 billion..didn't understand it.

 

 

THERE IS NO CAP!!!!!

[Twincam Harley]

From the Highlights:

 

Profit-sharing improved

Over time, Ford changed the way

it reported its profi ts. This diminished

our ability to truly share in the upside.

Our new plan will now use the same

profit figures that the company reports

to its shareholders thereby restoring

our ability to share in the company’s

success. Specific gains:

• Plan covers all North American

profits, not just those from the U.S.

Th e formula generates a fund

based on $1 per worker for every

$1 million in North American

pre-tax, pre-interest profit.

• The proposed profit share

defiition excludes so called

“special items” as well as net

interest expense. Between 2003

and 2010, “special items” reduced

the profit share fund by approxi

mately $17 billion, and net interest

expense reduced the UAW profit

share fund by $4.5 billion.

• The new plan eliminates technicalities

that could have deprived

members of profit sharing in

profitable years. These technicalities

could have eliminated all payouts

in 2010 if it had not been for the

strong intervention of the UAW.

 

 

Notice it says it excludes special interest items, meaning those items WILL NOT lower our profit sharing.

[qwertyuiop]

Hate to break it to you, but they lied... Here's the actual contract language:

 

Volume III, PP. 82-83, Definition 6:

 

“FNA EBIT” shall mean the Company’s North American income or loss before income taxes excluding extra-ordinary items, other automotive reconciling items (i.e. income/expense on debt and investments and related fair value adjustments) and special reconciling items as determined by the Company, in the manner

used to report 2010 Ford North America “Income/Loss before income taxes” in Note 28 of the Company’s 2010 Form 10-K. As in 2010, this definition will result in the exclusion from FNA EBIT of non-operating results that management does not consider when assessing and measuring the operational and financial performance

of Ford North America. In the event changes in terminology, reporting requirements or reporting practices (e.g. elimination of Sarbanes-Oxley Act) affect the calculation or public disclosure of FNA EBIT, as defined above, the affected calculation shall be performed in a manner consistent with the disclosure of financial performance to the Company’s shareholders and/or investment analysts of the Company’s operational and financial performance for North America.

The sentence in bold specifically excludes one-time items, then in bold and italics net interest expense. It also excludes anything else that is a "special reconciling item". I don't know how this can be made any more clear.

Europe's troubles costs US money. China's expansion costs US money. The interest Ford pays on their debt costs US money. Prove me wrong with a $4.45/hour profit share amount. We will never see it that high this year. As I have stated, it will be about the same, if not a little less.

[Twincam Harley]

Yes, it excludes the special items, meaning if they take a charge it doesn't affect profit sharing.

[SheetMetalJoe]

Definition of Exclude: to leave out (something) : to not include (something)

[SheetMetalJoe]

So are we getting "on average" about $8300.00???

[2seater]

Dont think he understands the meaning of the word exclude. LOL!

[MTP'er]

Our profit sharing is dismal compare to Honda or Toyota of Japan. Theres in the past were between $18,000 to $23,000 DOLLARS each or 2.05 millon yen.

[longball]

MTP'er.... any chance you could post a link to their profit share distributions? ....I couldn't find any links

[MTP'er]

http://www.goauto.com.au/mellor/mellor.nsf/story2/4A5E444FA580E4E1CA257B3200008B77

 

 

This is there profit sharing from 2013 for Toyota workers.

[longball]

Thanks...Their workers apparently aren't under any limits for profit sharing...

[littlecountry]

http://www.goauto.com.au/mellor/mellor.nsf/story2/4A5E444FA580E4E1CA257B3200008B77

 

 

This is there profit sharing from 2013 for Toyota workers.

This article refers to what the workers in Japan get it tells nothing about what the Toyota workers in the US get.