Ford, GM Stocks Rise as UAW Strike Gets Reaction from Wall Street

The stocks had initially declined in premarket trading, but Wall Street appeared to take the strike in stride.

Wedbush analyst Dan Ives told Barron’s he believes expectations for only a short-term strike helped push the stocks higher. Ives said he was hopeful the strike lasted no more than two to three weeks.

On CNBC, GM Chief Executive Mary Barra said she believes the strike could be resolved “very quickly.”

“The fear, if it’s longer than four weeks, is this could push out some EV initiatives in 2024 by three to six months,” Ives said. “And if this goes six to eight weeks, it would be a body blow ‘Nightmare on Elm Street.’”

Morningstar
analyst David Whiston noted markets may like that the strike is targeted to only three plants for now.

The union called workers off the job at three auto plants: a Ford plant in Wayne, Mich.; a GM facility in in Wentzville, Mo.; and a Stellantis assembly complex in Toledo, Ohio.

“I think many, including myself, were expecting initial strikes at powertrain plants but instead they are first targeting assembly,” Whiston wrote. “Maybe the UAW wants to give them one more chance before they go after powertrain or stamping facilities.”

Wells Fargo
analyst Colin Langan agreed, and told Barron’s the strike started much smaller than expected.

Fitch Ratings Senior Director Stephen Brown told Barron’s that the strikes would have a limited financial impact on the three major automakers, with only one of each of their plants impacted for now. However, pressure could be intensified over time if the union shifts to plants with more of an impact or adds more plants to the strike.

And at least one analyst saw some upside to the situation.

The UAW walked 12,700 workers from a Ford plant in Michigan that makes Broncos, a GM plant in Missouri that makes Chevrolet Colorado pickups and a Jeep plant in Ohio that makes Wrangler SUVs, wrote Navellier & Associates founder Louis Navellier.

“There is currently an excess inventory of these vehicles on dealer lots, so the UAW strike will help the Big 3 get their inventories under control,” Navellier wrote.

Investors shouldn’t expect any calmness in the weeks ahead for auto stocks.

Langan said he expects a “tremendous” amount of volatility ahead, as positive news of progress could drive stocks higher, and negative news of more plants getting involved or deals not being made could bring stocks down.

Write to Angela Palumbo at [email protected]