After Ford (F) -) failed to provide an enticing enough counter-offer, the United Auto Workers union expanded its strike against the automaker Oct. 11, targeting the company's immensely valuable Kentucky Truck plant.
Nearly nine thousand UAW workers walked off the job in a surprise departure from the union's previous format of announcing new strikes on a weekly basis. The plant in question generates around $25 billion in annual sales, prompting Wells Fargo analysts to predict that the escalation will cost the car company roughly $150 million every week that it remains struck.
Related: Why Ford will lose $150 million per week after latest UAW escalation
Approximately 34,000 workers of the union's 150,000 members are now actively on strike.
“We have been crystal clear, and we have waited long enough, but Ford has not gotten the message,” union president Shawn Fain said in a statement. “It’s time for a fair contract at Ford and the rest of the Big Three. If they can’t understand that after four weeks, the 8,700 workers shutting down this extremely profitable plant will help them understand it.”
With the union seeking 40% wage increases, in addition to better benefits and cost of living adjustments, many analysts and investors have questioned the viability of a deal with the UAW.
"I wonder whether the impact is so big here that if Ford compromises and gives in, whether they'll have enough money to be competitive to tackle Tesla (TSLA) -) and the Chinese," Jim Cramer, host of CNBC's 'Mad Money' said Oct. 12. "How will they do it if they give into this?"
Electric vehicle competition with non-union Tesla and foreign automakers, already a struggle for the Detroit Three, remains the focus for several prominent analysts beyond Cramer. Ford, for example, projected in July that its EV division will lose $4.5 billion this year alone.
Ford CEO Jim Farley said at the beginning of the strikes Sept. 14 that the company would go bankrupt if it agreed to the union's demands as-is, a point Elon Musk, Tesla's Chief Executive, agreed with.
"They want a 40% pay raise *and* a 32-hour workweek," Musk wrote in a post on X in late September. "Sure way to drive (GM) -), Ford and Chrysler (STLA) -) bankrupt in the fast lane."
Related: Tesla Chief Elon Musk has a warning for Detroit 3 amid ongoing auto strikes
Wedbush analyst Dan Ives has pegged Tesla as the real winner of the strikes since they began; a prolonged strike will disrupt the EV plans of the Detroit Three, a win for Tesla. A historic deal with the UAW could further hurt the margins of the Detroit Three, allowing Tesla to win the EV price war.
"Tesla, it's a win-win situation. It's a debacle in Detroit," Ives said Oct. 3. "Ultimately, this is going to be passed to the consumer when they do get a deal. The UAW deal, if they took that, it would impair the business models for the next decade."
Cramer, previously warning the UAW that it was "playing with fire" by going up against the likes of Ford, predicted Oct. 5 that Ford might consider ramping up production in Mexico to keep costs sustainable.
Ford has said it does not intend to shut down plants following a deal with the union.
Shares of Ford fell more than 2% Thursday.
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