Ford CFO Says Supply Chain Issues Easing, But Not Completely

[ice-capades]

Ford CFO Says Supply Chain Issues Easing, But Not Completely

https://fordauthority.com/2023/06/ford-cfo-says-supply-chain-issues-easing-but-not-completely/

 

 

After years of battling supply chain issues, the automotive industry began to turn the corner in the first half of 2023, as many expected. However, Ford continues to battle various problems and shortages, along with a tight labor market, which is precisely why CEO Jim Farley previously stated that he believes supply chain problems are more of a permanent thing rather than a temporary storm that will pass at some point. While speaking at the Deutsche Bank Global Auto Industry Conference recently, Ford CFO John Lawler shed some more light on this topic by revealing that while supply chain issues are easing, they’re still posing problems for The Blue Oval.

 

“Yes. So, we are seeing disruptions due to supply availability, but it’s much less than it was in the past,” Lawler said. “There’s still hiccups in chips, high demand chips that’s happening. And the other thing that we’re seeing is that as the water level overall is rising and production is coming back, we’re seeing some of the suppliers that are not chip related having issues keeping up, ramping up to average per week volumes, max per week volumes. And so, we’re working through some of those issues. And I think that’s still part of the overhang from COVID and the fact that factories weren’t running at that rate, maintenance wasn’t necessarily where it should be, labor shortages, etc. But we’re working through that, and it’s getting much better.”

Lawler’s comments coincide with what we’ve seen from Blue Oval production thus far this year, with many models seeing a sharp ramp up in that regard over the past few months. That list includes the the Ford Bronco Sport crossover, the Ford Transit van, the Ford Mustang Mach-E EV crossover, the refreshed Ford Escape crossover, and the Ford Maverick compact pickup.

 

As Ford Authority reported last week, even the Ford Bronco is facing no new supply constraints, which is big news for the in-demand SUV. However, some other red hot models – such as the Maverick Hybrid – remain constrained as demand still outweighs Ford’s production capacity.

Edited June 28, 2023 by ice-capades
Additional Content

[jpd80]

Never underestimate Ford’s ability to turn adversity into an opportunity to increase profits.

supply restrictions? Just build fewer vehicles but at a richer trim mix…….

[fuzzymoomoo]

8 hours ago, jpd80 said:

Never underestimate Ford’s ability to turn adversity into an opportunity to increase profits.

 

To that end, Farley wrote a piece in The Detroit Free Press this morning complaining about how much hourly employees make 

 

https://www.freep.com/story/opinion/contributors/2023/06/29/ford-jim-farley-uaw-contract-bargaining/70361242007/?fbclid=IwAR025oofZ2Abngp2oRFKDxpUChYT3AL4gQPrB7beo4TckrFwvi540hIg4vY

[silvrsvt]

4 minutes ago, fuzzymoomoo said:

To that end, Farley wrote a piece in The Detroit Free Press this morning complaining about how much hourly employees make 

 

https://www.freep.com/story/opinion/contributors/2023/06/29/ford-jim-farley-uaw-contract-bargaining/70361242007/?fbclid=IwAR025oofZ2Abngp2oRFKDxpUChYT3AL4gQPrB7beo4TckrFwvi540hIg4vY

 

Huh? How did get that from the article? I thought it was written fairly for both parties...I didn't see any bitching about how much hourly makes?

[fuzzymoomoo]

2 minutes ago, silvrsvt said:

 

Huh? How did get that from the article? I thought it was written fairly for both parties...I didn't see any bitching about how much hourly makes?

There’s an entire paragraph basically saying how we don’t deserve  what we’re asking for in these coming negotiations 

[silvrsvt]

3 minutes ago, fuzzymoomoo said:

There’s an entire paragraph basically saying how we don’t deserve  what we’re asking for in these coming negotiations 

 

This?

We’ve heard some claims that our wages have remained stagnant, but the truth is that over the past eight years, cumulatively, UAW-Ford employees’ wage increases plus annual inflation bonuses of $1,500 per year, which exceeded the cumulative compensation gains they would have experienced under a straight cost of living adjustment. By the end of the current contract, 80% of all Ford’s UAW-represented employees will be making the top wage rate of $32 per hour. All-in, the average hourly UAW-represented employee at Ford earns $64 per hour in wages and benefits — or $112,000 per year. Their medical plans cover all but 3% of health care plan costs on average; members pay zero premiums and the vast majority also pay no deductibles. In fact, Ford is in the top 1% of all employer-sponsored medical plans for the lowest employee cost sharing.

[fuzzymoomoo]

3 minutes ago, silvrsvt said:

 

This?
 

 

Yes. The part I found particularly insulting was the bragging about the $1500 “inflation protection” bonus. First, we only see around $950 of that between taxes and union dues. Second, that doesn’t do much when the cost of literally everything has gone up so much in the last year alone. 

[akirby]

4 minutes ago, fuzzymoomoo said:

Yes. The part I found particularly insulting was the bragging about the $1500 “inflation protection” bonus. First, we only see around $950 of that between taxes and union dues. Second, that doesn’t do much when the cost of literally everything has gone up so much in the last year alone. 

Dude, all he said was the negotiated raises plus the bonus exceeded what employees would have gotten using a straight cost of living formula adjustment.

 

If 80% are making $32/hr for what is arguably unskilled labor (but physically demanding) plus no health insurance premiums and no deductibles then I think you are completely out of touch with reality to complain.   
 

Most companies charge $100-$500/ month or more plus deductibles as high as $10k/yr.   That type of coverage is hugely expensive which is why he said you’re effectively getting $64/hr with benefits factored in.

[fuzzymoomoo]

31 minutes ago, akirby said:

Dude, all he said was the negotiated raises plus the bonus exceeded what employees would have gotten using a straight cost of living formula adjustment.

Sure, in gross dollars but that doesn’t take into that bonuses are taxed way more than a normal paycheck. 
 

If I’m out of touch, then what’s that say about a multi-millionaire who hasn’t had to worry about paying his bills for decades  who thinks a 4% raise when inflation is at or around 8% is sufficient? Personally I’m not asking for much even though I know the union is. A pension would be nice but for me it’s not 100% mandatory. I would much rather get that money as part of my normal paycheck instead of lump sums. 

 

I get our healthcare is amazing, and I’m incredibly grateful for that. It’s a great feeling having 3 kids without so much as a copay but by the same token why hold that over our heads? All it’s going to do is stir anger in the workforce. 
 

Nothing personal against the guy, he seems cool as hell and I’m positive I could have a fun conversation with him since we actually have some common interests but for him to
come out with that publicly when all the company has done for the last 3 years is complain about needing to cut costs while profits have been at or near record highs during the majority of that period is insulting as hell. 

 

 

Edited June 29, 2023 by fuzzymoomoo

[ice-capades]

47 minutes ago, fuzzymoomoo said:

Yes. The part I found particularly insulting was the bragging about the $1500 “inflation protection” bonus. First, we only see around $950 of that between taxes and union dues. Second, that doesn’t do much when the cost of literally everything has gone up so much in the last year alone. 

 

Sorry, but it's not fair to complain about having to pay taxes and/or union dues on additional income. 

[fuzzymoomoo]

4 minutes ago, ice-capades said:

 

Sorry, but it's not fair to complain about having to pay taxes and/or union dues on additional income. 

Which is why I would rather have it as part of my regular paycheck where the tax rate is lower. 

[HotRunrGuy]

10 minutes ago, fuzzymoomoo said:

Which is why I would rather have it as part of my regular paycheck where the tax rate is lower. 

 

Why does it matter?  April 15th of each year you are taxed on the total income, there are not different tax rates for base wages vs bonuses.  Taking more out of a bonus either provides a larger refund, or lessens what you owe.  It's just a money-shift.

 

HRG

[mackinaw]

I suspect Farley's comments were a counterpoint to what the new UAW leader has been saying.  Reading Shawn Fain's comments, you get the impression he absolutely hates Ford, GM and Stellantis.  

[akirby]

25 minutes ago, mackinaw said:

I suspect Farley's comments were a counterpoint to what the new UAW leader has been saying.  Reading Shawn Fain's comments, you get the impression he absolutely hates Ford, GM and Stellantis.  

Exactly.  He’s simply providing facts to counter the rhetoric from the other side prior to negotiations.  Nothing he said was untrue or misleading as far as I can tell.

[akirby]

53 minutes ago, HotRunrGuy said:

 

Why does it matter?  April 15th of each year you are taxed on the total income, there are not different tax rates for base wages vs bonuses.  Taking more out of a bonus either provides a larger refund, or lessens what you owe.  It's just a money-shift.

 

HRG

I assume he means he’d like more cash to spend at bonus time, but in the end you’re 100% correct.

 

It’s amazing how many people don’t know the difference between paying taxes and withholding.  They don’t understand that instead of a $2400 refund each April they could be getting an additional $200/month in their paycheck every month.

[akirby]

1 hour ago, fuzzymoomoo said:

Sure, in gross dollars but that doesn’t take into that bonuses are taxed way more than a normal paycheck. 
 

If I’m out of touch, then what’s that say about a multi-millionaire who hasn’t had to worry about paying his bills for decades  who thinks a 4% raise when inflation is at or around 8% is sufficient? Personally I’m not asking for much even though I know the union is. A pension would be nice but for me it’s not 100% mandatory. I would much rather get that money as part of my normal paycheck instead of lump sums. 

 

I get our healthcare is amazing, and I’m incredibly grateful for that. It’s a great feeling having 3 kids without so much as a copay but by the same token why hold that over our heads? All it’s going to do is stir anger in the workforce. 
 

Nothing personal against the guy, he seems cool as hell and I’m positive I could have a fun conversation with him since we actually have some common interests but for him to
come out with that publicly when all the company has done for the last 3 years is complain about needing to cut costs while profits have been at or near record highs during the majority of that period is insulting as hell. 

Ford spent $2B in warranty claims - of course they have to cut costs to stay competitive even if they’re making good profits now.  They’re not asking you to take a pay cut.

 

And they’re not “holding healthcare over your head”. They’re trying to make you understand that they are buying health care on your behalf - probably to the tune of $2500/month.  That is part of your total compensation whether you realize it or not.  The company would be happy to give you a $1500/month raise and let you get your own insurance.  But you’d be losing a lot of money.  
 

As for profits - don’t you get a nice profit sharing check based on that?

 

Also contracts work both ways.  It was negotiated with puts and takes on both sides.  As a hypothetical example - the union may want to protect certain jobs that Ford wants to eliminate, so in return the union has to give up something else like a 2% raise instead of 3%.  In that case if the union comes back and wants a bigger raise later then that changes the balance of what was previously negotiated.

 

Finally blame the IRS for the bonus withholding rate.  That’s their rule.

[Flying68]

3 hours ago, fuzzymoomoo said:

Which is why I would rather have it as part of my regular paycheck where the tax rate is lower. 

 

3 hours ago, HotRunrGuy said:

 

Why does it matter?  April 15th of each year you are taxed on the total income, there are not different tax rates for base wages vs bonuses.  Taking more out of a bonus either provides a larger refund, or lessens what you owe.  It's just a money-shift.

 

HRG

 

Federal tax withholdings on lump sum bonuses are 25%.  This may or may not be higher or lower than an individuals normal withholding (everyone is different).  They do this to make it easier to withhold, rather than using the tables or formulas based on frequency of payment which could result in an absurdly large withholding.  The 25% is basically the middle of the tax bracket and like @HotRunrGuy said, when you file your taxes, the lump sum bonus is part of your total income and calculates the same, so really the 25% just affects how much you get back or have to pay, but it isn't taxed at a different rate.

 

TL:DR Tax rates and withholding rate are not the same. 

[slemke]

7 hours ago, Flying68 said:

 

 

Federal tax withholdings on lump sum bonuses are 25%.  This may or may not be higher or lower than an individuals normal withholding (everyone is different).  They do this to make it easier to withhold, rather than using the tables or formulas based on frequency of payment which could result in an absurdly large withholding.  The 25% is basically the middle of the tax bracket and like @HotRunrGuy said, when you file your taxes, the lump sum bonus is part of your total income and calculates the same, so really the 25% just affects how much you get back or have to pay, but it isn't taxed at a different rate.

 

TL:DR Tax rates and withholding rate are not the same. 

It was reduced to 22% as part of the 2018 tax bill.  It aligns with the marginal tax rate for singles with ~45k to ~95k or married couples making ~90k to ~190k.  State income tax is often similar in how it is withheld.  You’re correct that it is a middle tax bracket…the momma bear bracket.  Too high for some, too low for others, and just right for some.

 

For a single Ford worker making the $32/hr Farley quoted, the bonus withholding would be at the marginal rate.  For a married single income person, it would be too much.  But, you’re free to adjust the withholding amount at any time on a W-4.  The online calculator may even breakout expected bonuses from salary to provide a better estimate of what should be withheld from each paycheck to compensate for the bonus withholding.

[fuzzymoomoo]

5 hours ago, slemke said:

But, you’re free to adjust the withholding amount at any time on a W-4.

The last time I tried to change it when my youngest was born there was a glitch in the system on the company’s end that nobody could figure out and taxes completely stopped being withheld so as far as I’m concerned that’s not an option for me. I’m probably having too much withheld and there’s not a thing I can do about it. 

[HotRunrGuy]

3 hours ago, fuzzymoomoo said:

The last time I tried to change it when my youngest was born there was a glitch in the system on the company’s end that nobody could figure out and taxes completely stopped being withheld so as far as I’m concerned that’s not an option for me. I’m probably having too much withheld and there’s not a thing I can do about it. 

 

Is the change in withholding done by the employee online, or submitted and done by HR?  Over the years, I've tweaked my status, # of dependents and additional amount withheld right after my yearly taxes were done, to try and achieve a break-even status with the tax man.  If you have access, I'd keep working on it.

 

HRG

[akirby]

3 hours ago, fuzzymoomoo said:

The last time I tried to change it when my youngest was born there was a glitch in the system on the company’s end that nobody could figure out and taxes completely stopped being withheld so as far as I’m concerned that’s not an option for me. I’m probably having too much withheld and there’s not a thing I can do about it. 

Sorry if it seems like we’re busting your balls on this.  Just trying to get you to see the bigger picture.

[fuzzymoomoo]

2 hours ago, HotRunrGuy said:

 

Is the change in withholding done by the employee online, or submitted and done by HR?  Over the years, I've tweaked my status, # of dependents and additional amount withheld right after my yearly taxes were done, to try and achieve a break-even status with the tax man.  If you have access, I'd keep working on it.

 

HRG

I filled out the paperwork and submitted to HR. FWIW, I wasn’t the only one who had that glitch happen. It was a nightmare just to get to the point where taxes were being taken out again so at this point I would rather just leave well enough alone rather than go through all that again. 

[fuzzymoomoo]

1 hour ago, akirby said:

Sorry if it seems like we’re busting your balls on this.  Just trying to get you to see the bigger picture.

Meh, I’m a big boy. I can handle it. 

[HotRunrGuy]

16 minutes ago, fuzzymoomoo said:

I filled out the paperwork and submitted to HR. FWIW, I wasn’t the only one who had that glitch happen. It was a nightmare just to get to the point where taxes were being taken out again so at this point I would rather just leave well enough alone rather than go through all that again. 

 

Gotcha!  Today is my first day of retirement, so the days of having to deal with (In)Human Resources are now behind me,,,,,

 

HRG

[Harley Lover]

10 minutes ago, HotRunrGuy said:

 

Gotcha!  Today is my first day of retirement, so the days of having to deal with (In)Human Resources are now behind me,,,,,

 

HRG

 

Congrats!