$1 billion tariff hit would mean $1,000 hit to Ford workers

Ford earned $7.5 billion in North America last year, resulting in $7,500 profit-sharing checks for its 54,000 UAW hourly workers. Photo credit: BLOOMBERG

Ford Motor Co. says it expects tariffs on steel and aluminum to cut profits by $1 billion by the end of next year. If so, that translates to $1,000 that President Donald Trump's trade war has taken from each Ford hourly worker — many of whom voted for Trump on the belief he would help their economic security.

The math is pretty simple. For every $1 million in North American profits that Ford posts each year, the average worker gets a $1 bonus the following spring, according to the formula written into the UAW's contract. In 2017, Ford earned $7.5 billion in North America, which resulted in $7,500 profit-sharing checks for its 54,000 UAW hourly workers.

So if Ford earns $1 billion less in North America -- where it's now paying higher commodity costs as a result of the tariffs, even though it already buys 95 percent of its steel from within the U.S. -- its profit-sharing payouts would drop by $1,000. The tariffs are designed to make more companies buy commodities such as steel from domestic sources, which Ford already does, yet its workers are going to earn less than they would have otherwise. The tariffs have caused prices for steel and other materials to rise, no matter where they're made.

UAW leaders, of course, endorsed Hillary Clinton over Trump. A survey conducted after the 2016 election concluded that 28 percent of UAW members voted for Trump. Trump's opposition to free trade, which many workers blame for eliminating U.S. factory employment and hampering wages, was among the chief reasons he amassed significant support among the union's rank and file.

Trump's tariffs have affected Ford in other ways, too. The company in August canceled a plan to import the Focus Active wagon from China, saying it no longer made sense. Most UAW members, who bristle anytime an automaker uses nonunion labor to build vehicles and bring them into the U.S., no doubt were happy about that.

But when it comes time to vote — this November and in the 2020 presidential election — Ford workers may go to the polls knowing that Trump's tariffs have directly hit them somewhere that really hurts: their paycheck.

You can reach Nick Bunkley at nbunkley@crain.com -- Follow Nick on Twitter: @nickbunkley

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