Ford eliminated pension in 2004 and started offering pension buyouts to those who previously quit/SIRP with lump sum offers in 2010 because they want pensions off their books as overhead. Todays remaining pensioned employees have the highest lump sum payout they’ll EVER have again. The FED knows they messed up keeping rates at 0% far too long. Pretty soon 4% will seem low as it did the prior 40 years. Lump sums drop 22% and smother 22% most likely this time next December 1.
Ford is about to go through the toughest period in their history as young people don’t care about cars, unless the car is like an iPhone (utility). Old people are done buying cars and have lost 20% in their fixed income retirement portfolios while inflation is just starting to rage, Democrats are raising taxes, paying off college debt, and energy costs in the green new deal which exasperates the inflation. The used car market has only started to tumble which will collapse Ford Credit profits (the only part of Ford making ALL the profits). Warranty costs are beyond comprehension. While Stellantis is thriving at massive margins. And don’t even mention Tesla who are just starting their exponential US and global growth. It costs them $35K to make a Model Y and sell it for double. Model Y is 2023 best selling vehicle in the world. Transitioning to EVs is a herculean effort just ask Elon.
If Ford survives the next 3 years it will only be with government loans.
If buying out pensions was a good thing for Ford on 2010, what do you think they will do in 2024 with lump sums almost halved? I have 0 doubt they will convert anyone left to 401K by cashing out of the GRP at the lump sum number on September 2023.
Saying there is a rough road ahead for junk-bond status Ford today is the understatement of this century