The rivalry between automakers and the United Auto Workers (UAW) union is intensifying as Ford Motor and Stellantis have successfully reached deals, while General Motors (GM) remains at the center of the battle.
UAW Announces Strike at GM Plant
In a recent announcement, the UAW revealed that its members will go on strike at another GM plant, just hours after reaching a tentative agreement with Stellantis. The affected facility is the GM Spring Hill plant located in Tennessee, which produces several Cadillac models, including the XT5, XT6, the all-electric Cadillac LYRIQ, and the GMC Acadia.
Approximately 18,000 Workers on Strike
With the addition of Spring Hill plant workers, the number of striking GM employees has now reached approximately 18,000, which accounts for around 40% of the total UAW workforce at this auto manufacturer. It is worth noting that not all 3,900 workers in the Spring Hill plant are UAW employees.
GM’s Response and Unanswered Questions
In response to the strike expansion, GM expressed disappointment and highlighted the progress made during negotiations. They emphasized their commitment to continue bargaining in good faith with the UAW and their goal of reaching an agreement as swiftly as possible. Meanwhile, the exact reasons for this escalation remain unclear as the UAW has not yet provided any comment.
Unexpected Turn of Events
The announcement of a strike expansion came as a surprise to investors who were anticipating a resolution rather than further labor disputes. Previously, Ford Motor and the UAW had announced a tentative agreement on October 25, setting a precedent for a potential settlement. Both the union and the automakers were aware of the terms that were deemed acceptable.
As the battle between automakers and the UAW continues, all eyes are now on GM to see how this conflict will unfold.
The Ford Contract and the Surprise Expansion of GM Strike
The Ford agreement involves a significant wage increase of approximately 25% over the duration of the four-plus year deal, including an 11% increase in the first year. On the other hand, no specific details of the Stellantis deal have been provided at this time, as the company has chosen not to disclose any specifics.
While the Saturday Stellantis agreement did not come as a surprise, the expansion of the GM strike certainly did.
However, this does not necessarily imply that GM will experience a significantly longer strike than the other two companies. The groundwork for resolution has been established based on the recent deals reached by two of the three automakers. It is possible that the union may have a few additional demands.
If GM fails to reach an agreement by Monday, it may not be received favorably by investors. The labor unrest has negatively impacted the shares of both GM and Ford. As of the end of Friday’s trading session, GM and Ford shares have dropped by 29% and 34% respectively, since July when contract issues first emerged. In comparison, the S&P 500 has experienced a decline of about 7% during the same period.
Meanwhile, Stellantis, being a more global company, has seen a 3% increase in its share prices over the same timeframe.
It is worth noting that the decline in share prices cannot be solely attributed to the strike. Ford’s stock experienced a 12% drop on Friday following disappointing third-quarter earnings announcement.
Nevertheless, bringing an end to the strikes will undoubtedly have a positive impact.