For auto investors, the weekend hasn’t been dull, and it isn’t over yet.
United Auto Workers President Shawn Fain is scheduled to speak on Sunday evening at 7 p.m. Eastern time. The talk can be watched here.
Union vice president and director of the Ford department Chuck Browning is slated to present. The main purpose of the Sunday event is to update members working at
Ford Motor
(ticker: F) about the tentative agreement reached by the car company and union on Oct. 25.
The deal, if ratified, will run into April 2028 and includes base wage increases of 25% over the contract’s life, along with other wage and benefit improvements.
Before the talk, the UAW Ford Council is meeting on Sunday to determine whether or not to take the agreement to the membership for a vote. It’s likely a formality, but this has been a volatile labor negotiating season. Nothing should be taken for granted. UAW workers at Mack Trucks voted down a tentative agreement on Oct. 9 and are still on strike.
Still, it seems likely that the Council and the members will ratify the new deal. Browning called on Ford workers to return to work while the ratification process was ongoing. Ford says the process of restarting plants is under way. Almost 17,000 UAW employees at Ford are on strike with several thousand more laid off because of production disruptions.
Overall, about 49,000 workers are on strike at Ford,
General Motors
(GM), and
Stellantis
(STLA), or roughly 30% of the total UAW employee population at the three companies. Several plants have been shut down, including plants that make profitable trucks and SUVs.
The UAW announced a tentative agreement with
Stellantis
on Saturday. The deal included wage increases similar to Ford. Union vice president in charge of Stellantis Rich Boyer added in a Saturday address that the UAW also won a commitment to add 1,000 EV-related battery manufacturing jobs at an idled plant in Belvidere, Ill.
After the Ford agreement, Wall Street expected Ford and GM agreements to follow shortly after. That’s what’s happened in the past. “With Ford getting a deal done we expect the other dominoes to fall with GM and Stellantis this week,” said Wedbush analyst Dan Ives shortly after the Ford deal was announced.
He was right about Stellantis, but the announcement of that agreement was followed by a strike expansion at GM with workers walking out at the Spring Hill, Tenn., facility that makes several Cadillac and GMC products.
GM and the UAW didn’t immediately respond to a request for comment about whether negotiations continue on Sunday, or what led to the strike expansion.
While specific sticking points aren’t known, wages shouldn’t be an issue. It’s unlikely GM workers will get substantially more or less than Ford and Stellantis workers. And UAW’s Fain announced earlier in October that GM agreed to make battery workers part of the union’s master contract with the company, which essentially means those future workers will be treated like workers making gasoline engines and traditional transmissions today.
Investors will be looking for clues about what’s coming at GM as well as signs the strike is set to wrap up at Ford and Stellantis.
Investors will be glad to see the strike end. It’s weighed heavily on the stocks. Through the end of Friday’s trading, Ford and GM shares were down about 34% and 29%, respectively, since the start of July when contract issues came to the forefront. The
S&P 500
is down about 7% over the same span.
Shares of Stellantis, a more global company, are up about 3% over that time.
The drop in share price can’t be blamed entirely on the strike, either. Ford stock dropped 12% on Friday after reporting disappointing third-quarter earnings.
Write to Al Root at [email protected]
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