Ford CEO Warns of Bankruptcy Amid UAW Strike, Raising Eyebrows

The Reuters headline reads “Ford CEO says UAW proposal could force bankruptcy.” It’s poor judgment for a CEO to hint their company may go bankrupt without strong evidence it’s imminent. Yet Ford’s CEO Jim Farley raised that specter publicly for some reason. Especially concerning for a public company.

Farley was trying to make a point about the UAW’s strike and demands like 40% raises over 4 years, 32 hour work weeks, and more benefits. Farley knows an eventual settlement will be expensive, but not as much as the UAW wants. There will be compromise.

“You want us to choose bankruptcy over supporting our workers,” he told CNBC. Let’s play out his comments. There is no way the UAW will drive a deal that will force a Chapter 11 filing. Such an incident could cost thousands or more union jobs. UAW chief Shawn Fain may have idiosyncratic behavior, but he is something better than a fool.

Farley’s comment relies on backward-looking logic. He said if the UAW got what it wants now back in 2019, Ford would’ve lost $15 billion over 4 years instead of profiting $30 billion. That actually bolsters the UAW’s point about Ford’s huge profits.

Farley has stumbled throughout his tenure. His bankruptcy comment is just another misstep. (These are America’s most hated companies.)

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