UAW Strike Nears Its Fourth Week

It’s been more than three weeks since the UAW took a stand against General Motors GM, Ford Motor F and Stellantis STLA. The UAW achieved a major breakthrough in negotiations when General Motors allowed its workers at joint-venture battery plants to be covered by union contracts, but the unprecedented strike is still ongoing. Meanwhile, even the EV king Tesla Inc TSLA is facing challenges.

The UAW Is Making Progress

As for wages, Ford offered a 23% hike followed by Stellantis who offered 20% and GM who offered about a 20% increase. All three automakers agreed to cut timeline to get to top wage rate from eight to three years. As for temporary workers, Ford raised the hourly wage to $21, while GM and Stellantis followed by $20. Ford and Stellantis agreed to reinstate the cost of living allowance and UAW President Shawn Fain stated that GM is not far behind. Neither of the three automakers agreed to restore pre-2007 defined benefit pension plans. As for plant closures, Ford agreed that the UAW has the right to strike over plant shutdowns with workers getting income protection, while Stellantis only agreed to the workers’ rights to strike over plant shutdowns. No agreement on the issue has been made with GM who is the only automaker to allow workers at joint-venture battery plants to be covered by union contracts.

GM Took Another Hit

On Tuesday, 4,300 workers at three of its facilities in Canada went on strike but the two sides reached a tentative agreement within a few hours.

AutoTrader executive editor and spokesperson Brian Moody finds General Motors to be the most vulnerable of the Detroit titans in these ongoing negotiations with the continuing strike having consequences for both the new and used automotive market.

Consequences Of The Strike

About 4,835 workers have been laid off since the UAW strike took off on September 15th. More precisely, GM furloughed 2,330 workers, Ford followed by 1,865 layoffs, followed by Stellantis who let go 640 workers. GM , Ford nor Stellantis have disclosed if they will be rehiring those workers once the strike comes to an end. According to Anderson Economic Group, three weeks of the ongoing strikes costed the U.S. economy $5.5 billion, with the three Detroit automakers losing $2.68 billion and part suppliers losing another $1.6 billion.

Tesla Is Also Facing Challenges Of Its Own

In September, Tesla experienced a 10.9% YoY volume drop in China-made EV sales as it sold 74,073 EVs that it built in China with Model 3 and Model Y specifically falling 12% compared to the previous month. On October 2nd, it already missed third quarter estimates for global deliveries due to planned factory upgrades that halted production.

Meanwhile, its biggest rival in China, BYD Company Limited BYDDY experienced a 42.8% growth in passenger vehicle deliveries that reached 286,903 vehicles. With the stabilisation of the economy, tax incentives and discounts it is offerings, Tesla is waiting for a revival of the consumer sentiment. But, it is also facing a probe by the European Commission who is investigating whether to set punitive tariffs to protect its producers from imports of cheaper Chinese-made EVs. The European Commission found that made-in-China EVs are typically one fifth cheaper than their made-in-the-EU counterparts due to tax breaks, subsidies and rebates. Tesla is the biggest exporter of China-made-EVs with its Shanghai plant making more than 700,000 vehicles last years which made half of its total output.

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.