It’s finally here. The Republicans managed to corral enough votes in both chambers to get the controversial tax cut package passed. Ford Motor Company (NYSE:F) is right at the center of attention, as it is one of the American firms that will see the most impact from the legislation. And luckily for F stock, it’s almost all good news.

As a result of this legislation, Ford is likely to enjoy three main benefits. One, consumer spending should rise as the majority of the middle and working class gets a decent-sized tax cut. Second, this bill provides tax benefits, oddly enough, for companies that offshore a lot of their manufacturing. And finally, Ford’s overall tax rate should fall sharply, leaving it with a windfall of gains going forward.

Rising Consumer Spending

The tax plan is bitterly divisive, and with good reason. Even many mainline Republican analysts and commentators seem to think the deal wasn’t structured well. And that’s to say nothing of the outrage from the left.

Regardless of all that, looking at F stock, there’s a clear and important takeaway. Most middle class families will be getting a tax cut. Sure, it’s not huge, but an estimated 75% of taxpayers get a break under the tax plan, with most folks in the middle brackets saving around a grand or two a year.

This isn’t a windfall by any means, however every little bit helps. Even President Bush’s gimmicky $300 tax rebate in 2008 provided a meaningful short-term stimulus to the economy. This tax cut provides several orders of magnitude greater impact to the average family.

Additionally, many companies have announced wage hikes or bonuses in the wake of the bill’s passage. AT&T Inc. (NYSE:T) will be paying its 200,000 workers a special $1,000 bonus to spread the tax cut’s benefits among its employees. Fifth Third Bancorp (NASDAQ:FITB) is raising its hourly wage to $15 for its 3,000 hourly workers. And so on.

For many people, the difference between minimum wage and $15/hour determines whether they can buy a car or have to ride the bus to work.

More Offshoring Ahead?

The Trump administration seems to have misjudged the policy effects of one part of its tax plan. Trump has made it no secret that he hates offshoring. All through the campaign, we heard about how jobs had to come back from Mexico and China to the heartland. U.S. industrial firms have earned heaps of praise from the administration for investing in the United States, while firms that built plants in Mexico are lambasted.

With that in mind, you’d think the tax plan would support domestic manufacturing. The lower tax rate for U.S. profits would support this notion. However, the removal of the restrictions on repatriating cash allow multinationals such as Ford to bring home profits from overseas at minimal expense.

Ford recently announced plans to move electric vehicle production to Mexico. The president of the United Auto Workers responded in a recent interview. He said:

“[Ford] has an opportunity to do something for the state of Michigan and the United States of America. People in Mexico are not going to buy electric vehicles. And we desperately need high-paying jobs and technology here. I mean, 7% of vehicle cost is labor. How much do they need to make in profits?”

He continued, adding that: “I get up and try to figure out where the administration is headed […] Look at the tax plan. It gives corporations an incentive to outsource.”

While that may be bad news for midwestern autoworkers, it’s almost certainly good news for F stock. Not only is Ford benefiting from the tax cut on a corporate level, it now gets even more benefits from manufacturing in Mexico. And it can leverage the threat of moving abroad to extract tax concessions out of local municipalities.

Lower Direct Taxes Going Forward

And saving perhaps the best for last, F stock stands to win big as the corporate tax cut goes into effect. Ford budgeted for a global 30% tax rate on its profits in 2017.

Now to be clear, Ford manufactures and sells vehicles in a massive number of countries. We can’t just look at the U.S. cutting its corporate rate from 35% to 21% and extrapolate out how much more profit Ford will make.

That said, Ford is certainly going to save a bundle. The U.S. had the highest corporate tax rate of any major Ford market. The EU averages a paltry 19% corporate tax rate throughout its member states. China comes in at 25%. Canada is at 26%. Even Mexico, a relatively high-tax jurisdiction, is at 30% — well under the old U.S. rate.

By simple deduction, we can conclude that if Ford’s overall tax rate was 30%, and its other key markets were all at or under that number, the 35% U.S. rate was causing Ford to suffer a great deal of tax burden. The drop to 21% in the U.S. should lower Ford’s overall tax burden significantly.

My rough guess, based on its overall tax rate falling by approximately 5%, is that Ford will save around $300 million/year, adding almost 10% to its EPS figure going forward.

F Stock Outlook

Analysts share similar enthusiasm as far as earnings go. F stock is trading at an 11x PE ratio now. The consensus estimate has that going to just 8x PE next year, as earnings explode from $1.10/share up to $1.57. I’m not sure they’ll get quite that far.

However, the tailwinds here from rising consumer spending, cheaper access to foreign manufacturing, and a sharply reduced overall tax rate will be enormous.

F stock has had a pretty uneventful year, and I don’t blame investors for being a bit nervous with the auto cycle appearing to peak recently. But there’s a lot to like here, and F stock’s 4.8% dividend yield only adds to the appeal.

At the time of this writing, the author held no positions in any of the aforementioned securities. You can reach him on Twitter at @irbezek.