The United Auto Workers is expanding its strike of the Detroit automakers to 38 parts and distribution plants in 20 states operated by General Motors Company (NYSE:GM) and Stellantis NV (NYSE:STLA, EPA:STLA), union president Shawn Fain said Friday morning.
The union is not launching additional strikes at Ford Motor Company (NYSE:F) facilities because the company has shown it’s “serious about reaching a deal,” Fain said on Facebook Live.
“We still have serious issues to work through, but we do want to recognize that Ford is showing that they’re serious about reaching a deal,” Fain said. “At GM and Stellantis, it’s a different story.”
The UAW and Ford have made progress on important issues such as eliminating some wage tiers, reimplementing cost-of-living adjustments (COLA) and a more favorable profit-sharing formula, Fain noted.
The union also won the right to strike over plant closures during the term of the contract.
Ford said it is “working diligently with the UAW to reach a deal,” but added, “We still have significant gaps to close on the key economic issues.”
Meanwhile, the additional strikes on GM and Stellantis involve about 5,600 auto workers. That adds to the nearly 13,000 workers who began striking when the UAW’s previous contracts expired at 11:59 pm on September 14.
The decision to target just two of the three automakers with additional strikes is a sharp move, according to analysts at Wedbush.
“This is an aggressive move that essentially goes at the hearts and lungs of auto operations for GM and Stellantis given the ripple impact/pressure points and is a clear shot across the bow at both GM and Stellantis,” the analysts wrote.
For Ford, “a settlement [is] likely in our view over the coming week for Farley & Co.”
If a deal with Ford does get done, the details around profit sharing and other UAW asks could exert significant pressure on GM and Stellantis.
“The UAW and GM/Stellantis now have crossed the invisible line and the UAW strike is about to get a lot nastier which could have a massive impact on GM's EV plans as well as billions of lost revenue/production depending how long this UAW debacle lasts,” the analysts noted.
Shares of Ford are up 2.5% Friday afternoon on the news, with GM down 0.5% and Stellantis up 0.2%.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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