The United Auto Workers (UAW) announced Thursday night it will strike against Ford, General Motors and Chrysler-Jeep parent Stellantis, as the deadline for new labor contracts passed without agreements in place. Ford stock, General Motors stock and Stellantis stock rose higher Friday as the auto strike began.
United Auto Workers members walked off the job at three U.S. auto plants on Friday, one for GM, Ford and Stellantis' Jeep. The two sides are still far apart on new labor deals, the current contracts expired at 11:59 p.m. on Sept. 14. UAW, which represents 150,000 autoworkers, announced Thursday night it would begin with a targeted strike vs. a complete shutdown.
"For the first time in our history we will strike all three of the Big Three at once," UAW President Shawn Fain said Thursday. "We will show our strength and unity on the first day of this historic action."
CFRA analysts Garret Nelson wrote late Thursday that the UAW has a "level of bitterness that's beyond anything we've seen in the industry for a long time."
"Their last 4-year labor deal was struck just months before the pandemic hit, and then pandemic ended up being a boon for automakers' bottom lines," Nelson said of the auto strike.
The UAW is looking for around a 40% hourly pay increase, a reduced 32-hour work week among other items on the table. On Monday, news reports emerged the union cut its pay raise request to the mid-30% range, but no deal has been reached with Ford, GM or Stellantis.
Wall Street Bets On Short Auto Strike
GM, Ford and STLA edged higher Friday during market trade. Ahead of a possible auto strike, the 35 stocks in the IBD Auto Manufacturers industry group have collectively advanced 55% in 2023. The auto group ranks a strong No. 4 out of the 197 industries tracked by IBD, according to MarketSmith.
However, Wall Street is betting on a relatively short auto strike with minimal disruptions to production and the economy. But a protracted labor fight for GM, Ford and Chrysler could be good news for nonunion firms such as Tesla, Toyota and Honda.
Tesla stock rose slightly Friday morning, along with Toyota and Honda. All three auto stocks have been rallying this week.
Meanwhile, Wedbush analyst Dan Ives, a big TSLA stock bull, wrote Friday the firm worries this could be a "long and nasty" auto strike "which would be an absolute debacle for the Detroit Three."
UAW also has a $825 million strike fund and newly increased strike pay, which could prolong an auto strike, according to analysts. Citi has estimated a potential two-week auto strike could hit GM profits by $1.3 billion. The firm predicts Ford could take a $1.6 billion hit to its bottom line.
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