The United Auto Workers expanded strike against the Big Three entered its 11th day on Monday, with additional details emerging from Ford’s (F) deal with Canadian auto workers but no breakthroughs stateside. In addition, President Joe Biden’s impending arrival to the picket lines comes as dealers raise the alarm over parts and supply shortages.
Following ratification of the new deal in Canada, Ford said Canada’s Unifor auto union and the automaker agreed to the following terms: a 15% wage hike across the life of the three-year contract, a C$10,000 ratification bonus and C$4,000 for temp workers, increased retirement and raised pension benefits, and a decrease in new hire wage progression (or pay tiers) by 50%. Note that Canada has universal national healthcare, so those benefits are not applicable here (and have an impact on overall wages generally).
Despite the positive news of Ford’s Canada deal, and UAW’s decision not to expand its strike against the Dearborn automaker on Friday, Ford still said much work needs to be done with the UAW. The UAW expanded its “stand up” strikes against GM (GM) and Stellantis (STLA) at 38 parts distribution facilities, but spared Ford claiming it was making “real progress” with the automaker.
“Although we are making progress in some areas, we still have significant gaps to close on the key economic issues. In the end, the issues are interconnected and must work within an overall agreement that supports our mutual success,” Ford said in a statement on Sunday.
As negotiations continue with the UAW and the Big Three, presidential politics enter the fray with President Joe Biden’s visit to Detroit on Tuesday, after former President Donald Trump said he would rally with auto workers.
“I’ll go to Michigan to join the picket line and stand in solidarity with the men and women of UAW as they fight for a fair share of the value they helped create,” Biden said via his X account. On Wednesday, Trump is expected to hold a rally with 500 former or current union members in Clinton Township, Mich.
The UAW said it welcomed Biden’s visit to the picket line, though it condemned Trump’s presence. “Every fiber of our union is being poured into fighting the billionaire class and an economy that enriches people like Donald Trump at the expense of workers,” said UAW president Shawn Fain in a statement last week.
While the rhetoric heats up on both the picket line and the political stage, GM and Stellantis dealers (selling Chrysler, Ram, and Jeep vehicles) are raising concerns over parts shortages and higher prices following the expanded UAW strikes and parts centers.
“It’s going to become near impossible to get a lot of these parts,” Richard Fasulo, a mechanic at a New York state Cadillac dealer, said to Reuters. “[The strike] is going to have these shops telling their customers, ‘We don’t know when we can fix your vehicle. It might be indefinitely.'”
Other dealers told Reuters they expect the strikes to lead to limited choice for vehicle purchases and cars clogging service bays at dealers, waiting for parts.
Experts believe GM and Stellantis may try to alleviate supply problems by getting parts elsewhere. “In the short term we will see a demand reduction and consequently less production in the existing factories. We will also see production diversion, where possible, to Mexico and other factories that are not affected by the strike,” said Vidya Mani, associate professor at University of Virginia’s Darden School of Business, to Yahoo Finance.
Wall Street believes the parts and supply distribution could be potentially severe for GM and Stellantis, which saw their shares dip on Friday, while Ford stock rose.
“We think the walkout at the parts distribution centers of GM and STLA could have a debilitating impact on each company’s auto production and repair capabilities, raising the probability that the companies will either make concessions similar to those made by [Ford] or announce countermeasures,” said CFRA analyst Garrett Nelson in a note to clients.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
Credit: Source link
