Ford Makes A Rare Move In A Desperate Attempt To End The UAW Strike

On Monday, Ford Motor F Executive Chairman Bill Ford made a rare move as he called on the UAW to make a deal and end the agonizing strike that is threatening not only the future of the automaker but of the American automotive industry. Last Tuesday, Ford already stated it is at the limit of what it can offer to the United Auto Workers and but on Wednesday, it got an unpleasant surprise as the UAW expanded the strike to its most profitable plant that brings in one sixth of its global automotive revenue.  

GM And Ford’s EV Plans Are At Risk

With the Kentucky plant, the UAW hit Ford hard as this plant alone bring in $25 billion in annual revenue. Ford and General Motors GM announced ambitious EV plans that were practically funded by strong profits from combustion trucks and SUVs. Before the UAW strike, both GM and Ford scaled down their EV plans during summer, simultaneously increasing their cost cutting efforts. With the mounting costs of the UAW strike and the eventual settlements, these EV plans are at serious risk. GM already revealed that the strike took $200 million from its third quarter profits and that it got a $6 billion credit line as insurance. On Monday, JP Morgan analyst Ryan Brinkman estimated that Ford is now losing $44 million a day followed by GM who is losing $21 million a day, therefore the strikes are costing the two automakers more than $500 million. Precise figures will be known when GM reports its third quarter results on October 24th with Ford scheduled to release its third quarter results on October 26th. 

Over 34,000 UAW Workers Employed At Detroit's Three Automakers Are On Strike

Last week ended with Stellantis STLA and Ford Motor stating on Friday they will be temporarily laying off 1,250 employees due to the strike. Stellantis now has 1,340 employees on temporary layoff across three states, including the 700 employees it laid off on Friday. With the Kentucky truck plant and Chicago Assembly plant walkouts, Ford temporarily laid off 550 employees last week and announced it will be dismissing 300 employees at an Ohio transmission plant, about 250 at four Michigan plants and 12 in Chicago. With the Kentucky plant down, a dozen of Ford’s facilities are to suffer the impact of the strike. Since this unprecedented workers’ action kicked off, Ford laid off 2,480 workers. 

Meanwhile, Expectations Are Low For Tesla Who Is Due To Report Its Quarterly Results This Week

On late Wednesday, the EV king, Tesla Inc TSLA is due to report its third quarter performance after already revealing lackluster Q3 deliveries. Earlier in October, Tesla revealed it delivered 435,059 EVs which is a 6% drop compared to the second quarter. However, all eyes are on the fourth quarter when Tesla could rebound with the Cybertruck launch and revamped model 3 deliveries in China. Therefore, analysts will be looking less at Q3 numbers and more on the fully year guidance and the pricing/margin strategy that Tesla executives are expected to communicate.

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