(Bloomberg) -- Ford Motor Co. restored financial guidance Thursday, saying profits would come in lower than earlier projections due to rising labor costs from its new contract with the United Auto Workers union.

The automaker now expects 2023 adjusted earnings before interest and taxes to be in a range of $10 billion to $10.5 billion, according to a statement. That’s lower than the $11 billion to $12 billion the automaker forecast in July before suspending guidance in October during the six-week strike by the UAW.

Shares fell 1.1% as of 9:45 a.m. in New York. Through Wednesday’s close, Ford stock has dropped 8.9% year to date.

Ford estimated its labor costs will rise by $8.8 billion over the four-year and eight-month duration of the new contract covering its 57,000 US hourly workers. The automaker previously said higher labor costs would add about $900 to the cost of each car, shaving margins by as much as 70 basis points.

The $1.7 billion in losses it suffered during the strike, higher than its October estimate of $1.3 billion, still takes a toll on its financial results this year. Vehicle production, including “high-margin trucks and SUVs,” was about 100,000 lower than planned due to the strike. 

Ford says it expects to mitigate the expense of the new contract through cost cuts and productivity improvements. 

“We need to work on driving productivity and efficiencies and reducing the labor hours — the hours it takes to build a vehicle and reducing that cost,” John Lawler, Ford’s chief financial officer, said Thursday on Bloomberg Surveillance. 

General Motors Co. on Wednesday also restored and lowered its guidance for the year and said the new UAW contract would cost $9.3 billion, adding about $575 in expenses to each vehicle. GM also announced a $10 billion stock buyback, its biggest ever, and boosted its dividend by 33%.

Lawler told BTV that he was “not exactly sure why” GM is estimating a lower cost-per-car impact from the UAW contract, but it could reflect Ford’s larger manufacturing footprint in the US.

A GM spokesman confirmed after the interview that the cost-per-vehicle difference is in part due to production locations. The automaker has more plants in Mexico, where workers are not covered by the UAW contract, and Canada, where workers are represented by Unifor.

And GM’s $575 per car is an average added cost over the life of both its new UAW contract and new Unifor contract, while Ford’s $900 is the current cost per vehicle by the end of the UAW contract. Ford hopes to reduce that number through production efficiencies.

The UAW’s contract is the richest it has negotiated in decades and includes a 25% wage increase and the restoration of a cost-of-living allowance that boosts total compensation by 33%. UAW President Shawn Fain is now targeting 13 nonunion automakers in America with organizing drives.

Lawler said that Ford expects that electric vehicles will be fewer than half its sales by 2030. Tom Narayan, an analyst for RBC Capital Markets, said the market is focused on the drag to automakers from their EV businesses. 

“As we heard from GM yesterday, the EV slowdown in the US is very real,” he wrote in a note to clients Thursday.

--With assistance from Jonathan Ferro and Lisa Abramowicz.

(Updates with shares, context on strike’s added costs per vehicle, analyst comment from third paragraph.)

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