General Motors (GM), Ford (F), Stellantis (STLA) Dip on UAW Strike
The United Auto Workers’ (“UAW”) strike continues to make headlines as the impasse enters its fourth day. This coordinated strike, a historic event with the union simultaneously striking against the Big Three automakers, General Motors Company GM, Ford Motor Company F and Stellantis N.V. STLA, comes at a time when labor unions in the United States are experiencing increased approval among the public, notwithstanding declining membership in recent years.
Around 12,700 UAW workers have taken part in the strike and have targeted three plants — GM's Wentzville, MO, plant, Stellantis' Toledo Assembly and Ford's Michigan Assembly Plant in Wayne. The number of people participating in the strike is less than 10% of the total UAW membership, but in choosing these strategic plants, UAW president Shawn Fain has insisted that they are going to hit where they “need to hit”.
Support has also come in from the upper echelons of the government, with no less than President Biden supporting what he sees as the UAW’s effort to secure fair wages for the workers. Insisting that the industry needed labor agreements for the future, Biden has also sent senior government personnel to act as a negotiator between the striking labor force and the Big Three.
There has been some headway made with Stellantis, which has improved its offer to the UAW over the weekend in the order of an immediate 10% increase in pay and a 21% wage increase over the course of the contract. Ford and General Motors, however, have remained unrelenting and insisted that the strike would push them to lay off workers in the upcoming week. It remains to be seen whether further inroads are made as talks continue.
While Stellantis and Ford have been having a good year, with stock prices increasing 45.5% and 15.4%, respectively, General Motors has remained flat, falling a mere 0.1%. However, Ford, GM and Stellantis fell 2.1%, 1.8% and 1.6%, respectively, on Monday, as it became clear that the strike will be a longer ordeal than previously thought. This rot might continue.
All three stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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