Road to Resistance
UAW President Shawn Fain warned that nearly 150,000 of its members are set to strike if the automakers do not meet their demands. The existing contracts are set to expire on September 14.
The confrontation is expected to be contentious and potentially expensive. For context, union membership is firmly against concessions and has expressed deep concerns over job security amidst the industry’s shift towards electric vehicles.
Rising Support for Organized Labor
Shawn Fain’s resolve to upend the status quo is particularly noteworthy. The president’s commitment to aggressive bargaining for new contracts is rooted in a broader fight against what he calls “corporate greed” and powerful multi-billion dollar corporations. More importantly, he believes the national sentiment is on his side, due to the recent wave of support for organized labor in the United States.
UPS (UPS), Starbucks (SBUX), and Boeing (BA) are just a few of the long list of companies caught in the crosshairs of strikes this year. Hollywood studios faced a similar challenge starting in April, highlighting the growing momentum of organized labor movements.
Billion-Dollar Bumpy Ride
If this standoff progresses into a prolonged strike, it’s projected to take a massive financial toll on the Big Three car giants.
The estimated impact on the automakers could reach into the billions quickly. General Motors could lose $770 million per week. Ford Motor might take a $620 million weekly hit and Stellantis could lose $470 million per week. According to projections, a strike would impact adjusted earnings per share as well. General Motors could potentially see a decrease of 46 cents, Ford Motor 11 cents, and Stellantis 12 cents.
Ultimately, this fight over wages could reverberate across the auto industry, impacting stock prices, corporate profits, and the livelihoods of thousands of workers. It’s something to keep on the radar heading into the fall.
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