Ford Calls Back Employees - Analyst Blog

Ford Motor Co. (F) and UAW have recently teamed up to bring back nearly 2,000 people to the motor manufacturer's factories. The company thus manages to retain its former employees, who would else have migrated to parts supply companies, both within and outside the U.S.

Ford claims to have already reinstated 1,340 employees into 24 of its plants and plans to add 635 more by 2012, thereby fulfilling its target of 1,975. Alongside, the company has also revised its factory-level contracts to make the plants more efficient.

Back in 2007, Ford and UAW agreed to bring 1,559 jobs to its plants. However, the recent agreement raised the company's commitment to the union by more than 25%.

Presently, Ford imports gas-electric hybrid transmission components from Japan, battery pack assembly from Mexico, steel forging from India and transmission gear machining from Japan. But with the increased employment in the company, it will be able manufacture these items in their plants itself, assuring better quality standards and reliability.

The company does not expect to face a huge rise in expenses, as wages are as low as $14 per hour, about half the hourly rate of the current workers.

Recently, Ford Motor obtained a loan guarantee worth $250 million from the Export-Import Bank of the United States to finance its export sales. The company decided to use its U.S. facilities for the manufacture of the export models. The call-back spurt will help meet this demand.

Moreover, the Missouri state government decided to provide Ford with incentives worth $100 million to encourage the company to invest further in its Kansas City Plant, which will create further jobs.

Ford reported a net income of 61 cents per share during the second quarter of 2010, beating the Zacks Consensus Estimate of 40 cents per share. Operating profits were $2.9 billion, a $3.5 billion improvement over the year-ago quarter. Ford succeeded doing good business in the Asia-Pacific markets, specifically India (where quarterly sales tripled) and China (where sales growth was by 20%).

 
FORD MOTOR CO (F): Free Stock Analysis Report
 
Zacks Investment Research