General Motors
handed the United Auto Workers a huge win. The auto maker is offering to put its electric vehicle battery plants into the master agreement that governs UAW workers at GM.
The battery plants are now, essentially, just like workers in engine and transmission plants. It was a sticking point for the auto makers and means the strike is earning and end and means that the UAW is winning some major concessions.
GM stock is up 1.3% at 2:21 p.m.
The is breaking news. Read a recent UAW update below.
GM recently made a sixth offer in an attempt to settle the United Auto Workers strike at its plant ahead of Friday when union President Shawn Fain will provide an update on negotiations with the Big Three auto makers.
In mid-September, Fain instructed union members to stop work at one plant operated by each company and he expanded the action in later weeks. A fresh update from Fain will come on Friday at around 2 p.m. Eastern time. GM said it had made another counteroffer as it seeks to head off an escalation of the walkouts.
Fain spoke earlier Friday at an Economic Policy Institute conference. “Our union has been dormant, has been complacent for my entire 29 years,” said Fain about why he ran for president. “It’s been a massive, massive source of frustration for me.”
He didn’t dive into contract or negotiation details, however.
“We can confirm that we provided a counter offer to the UAW’s most recent proposal—our sixth since the start of negotiations,” GM said late Thursday. “We believe we have a compelling offer that would reward our team members and allow GM to succeed and thrive into the future. We continue to stand ready and willing to negotiate in good faith 24/7 to reach an agreement.”
GM declined to provide specifics of its sixth proposal but investors know some of what has been offered. The company is offering big immediate wage increases to offset inflation with hourly rates going up between 16% to 40% depending on wage classifications. They are also offering inflation protection: If annual contract wage increases lag behind inflation, workers will essentially get the inflation rate as an increase.
Ford Motor
(F) has made seven offers. Along with wage increases, Ford is also offering to end wage tiers that have been in effect for more than a decade. The tiers essentially limit the top wage rate newer employees can reach. They were set up in response to auto makers’ struggles to deal with the 2008-2009 financial crisis, as well as competition from foreign auto makers with nonunion workforces in mainly southern U.S. states.
Stellantis
(STLA) declined to say how many offers it has made. It is offering bigger increases upon ratification, with total wages over the life of the contract rising by more than 20% on average. The company is also offering inflation protection as well, as no wage tiers in its parts business.
So far, none of it has been good enough to end the strike. Investors will have to wait and see what will happen when the UAW’s Fain speaks Friday afternoon.
GM stock was up 1.8% in Friday trading at $30.85 after slumping 2.4% on Thursday, closing at $30.31, the lowest since the $29.59 it recorded on Sept. 30, 2020, according to FactSet. The drop Thursday was catalyzed by news that GM might have to recall as many as 20 million vehicles to replace an air bag part, sending shares lower.
Coming into Friday trading, GM shares were off about 22% since the start of July, when a strike began looking likely, while the
S&P 500
was down about 3%. Ford shares were down 21%.
Stellantis
shares were up about 8%.
Stellantis is a more global company, less affected than the other two by the UAW strike. Stellantis stock is also cheaper trading for less than four times estimated 2024 earnings. GM and Ford shares trade for less than five and seven times, respectively.
Write to Rupert Steiner at [email protected]
Read the full article here
