Monday, June 24, 2024

UAW strike update: Layoffs pile up at GM, Ford and Stellantis as negotiations continue

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UAW Expands Strike Against GM And Ford

Bill Pugliano/Getty Images News

The United Auto Workers strike against Detroit automakers General Motors (NYSE:GM), Ford Motor Company (NYSE:F), and Stellantis N.V. (NYSE:STLA) is now in its fourth week as negotiations and counteroffers continue.

The latest offer from General Motors (GM) includes 20% wage increases over the life of the contract, with the first 10% increase in the first year. All full-time UAW-represented employees will make $39.24 an hour by the end of the contract, according to a GM representative. General Motors (GM) also said it will reinstate cost of living adjustments for workers at the maximum wage in the second year of the contract, and includes a shorter timeline to get to the max wage level. The UAW has already scored a concession from General Motors (GM) to include electric vehicle battery production in its national agreement with the union.

Meanwhile, Ford Motor (F) announced 71 workers at the Livonia Transmission Plant were laid off, effective on Monday. “This layoff is a consequence of the strike at Chicago Assembly Plant, because Livonia Transmission Plant must reduce its production of parts that would normally be shipped to Chicago Assembly Plant,” read a Ford (F) statement.

Stellantis NV (STLA) stated on Monday that it laid off more than 500 workers at Downriver’s Trenton Engine Complex and a few dozen more in Indiana in what is called a direct response to the United Auto Workers’ strike at its Wrangler and Gladiator plant in Toledo, Ohio.

There are a total of 43 locations where the UAW are actively striking, although the strike did not expand this week.

Over the last six weeks, shares of General Motors (GM) fell 5.4% and Ford (F) slipped 0.9%, while Stellantis (STLA) has poked out a 3.2% gain. On a year-to-date check, Stellantis has also topped its major auto rivals, as well as outperforming the S&P 500 Index.

Industry analysts are in general consensus that the UAW strike is likely to be settled in a month or two, with concessions made from both sides. For investors, the reset will be what will be the long-time impact of the higher wage and benefits base.

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