The United Auto Workers strike against the Detroit Three auto makers continues into its 35th day, leaving everyone affected eagerly anticipating a resolution, especially considering the time of the year. This Friday, workers, employers, and investors will receive an update on the progress of negotiations.
A Relatively Quiet Week
This week saw a relatively calm period for the strike. There have been no new instances of workers walking out at major plants. However, Ford Motor (F) and Stellantis (STLA) had to temporarily lay off additional workers due to disruptions in production.
Anticipation Builds for UAW President’s Address
Excitement is expected to mount later in the day as UAW President Shawn Fain is scheduled to speak, according to Reuters. The UAW has not yet responded to requests for confirmation of the details.
While it is not surprising that Fain will deliver an update, the timing of this address is unique. Previous updates from the president typically began around 10 a.m. Eastern time. However, this announcement is slated for 4 p.m. Fain typically starts speaking slightly after the designated start time, meaning the stock market will be closed when Friday’s update commences.
Therefore, the majority of the stock market’s reaction to the news will take place on Monday when investors have time to digest Fain’s statements.
Preparedness for Varied Outcomes
Investors should be prepared for various scenarios. Possibilities range from a tentative agreement being reached with one company to workers walking out at additional facilities. Currently, approximately 33,000 out of roughly 145,000 workers are on strike. Additionally, thousands more have been laid off due to disruptions throughout the car companies’ networks of factories caused by the strikes.
Negotiations and Rhetoric
UAW President Shawn Fain has employed an aggressive tone in his rhetoric throughout the strike. Each publicly disclosed offer from the auto makers has been met with some form of derision. However, a resolution may not be as distant as these statements suggest.
As everyone eagerly awaits Friday’s update, it remains to be seen whether a deal will finally be struck, bringing an end to the UAW strike against the Detroit Three auto makers.
UAW Local 862 President Optimistic About Resolving Ford Strike Before the Holidays
UAW Local 862 President Todd Dunn, who represents the striking workers at Ford’s Kentucky Truck Plant, expressed optimism that a fair deal could be reached soon. Negotiators have made significant progress, and Dunn believes they are close to an agreement. Bill Ford Jr. jokingly stated that he could send out Christmas cards if a resolution is reached before December 25.
However, Dunn emphasized that he does not want the strike to continue until Christmas. He believes that neither Ford Motor Company, the economy, nor the American people are prepared for such a prolonged strike. He believes that resolving the strike sooner rather than later would be beneficial for everyone involved.
The timing of a potential resolution is crucial, considering the approaching holiday season. If the strike were to continue into late November or December, it would undoubtedly dampen the holiday spirit for thousands of households.
Apart from the timing aspect, ending the strike by mid-November, for example, would provide a much-needed boost to these families. Recent labor agreements often include signing bonuses, such as the 10,000 Canadian dollars (US$7,300) bonus received by General Motors (GM) workers represented by Unifor in Canada after ratifying a three-year labor deal.
While holiday timing is a factor to consider, it alone will not be what brings an end to the strike. It is just one more element in the overall equation.
As of Friday trading, GM and Ford shares have experienced declines of approximately 24% and 23%, respectively, since July when labor issues began dominating investors’ concerns. In contrast, the S&P 500 has only dropped by about 4%.
Stellantis shares, on the other hand, have seen an increase of 8%. Since Stellantis is a more global company compared to Ford or GM, with a larger portion of its business conducted outside the U.S., the strike has a relatively smaller impact on its operations. Additionally, Stellantis’ stock is considered more affordable, trading at less than four times estimated 2024 earnings per share, while Ford and GM shares trade at less than seven times and five times, respectively.