UAW walkout: First ever simultaneous strike begins at Detroit Three
Bill Pugliano/Getty Images News
United Auto Workers went on strike against the "Detroit Three" on Friday after talks over union demands broke down and the employees' four-year contracts with the companies expired at midnight.
Around 13K auto workers went on strike at three factories owned by General Motors (NYSE:GM), Ford (NYSE:F) and Stellantis (NYSE:STLA). This marks the first time that all three Detroit automakers have been hit by a UAW strike at the same time.
Not all of the 146K UAW members at the automakers' plants are on strike yet. UAW President Shawn Fain has warned that more plants could be added to the strike if the companies don't meet workers' demands.
"They could double our raises and not raise car prices, and still make millions of dollars in profits," Fain said. "We're not the problem. Corporate greed is the problem."
Workers have been calling for wage hikes and defined benefit pensions for new staff, among other demands. GM (GM) and Ford (F) offered a 20% increase, while Stellantis (STLA) offered 17.5%, but UAW rejected these offers.
The walkouts will halt production of popular vehicle models including Ford Bronco, Jeep Wrangler and GMC Canyon. Deutsche Bank estimated that a full strike would hit the Detroit Three's earnings by ~$400M-$500M each per week of lost production.
Tesla (NASDAQ:TSLA) - which is not represented by a union in the U.S. - is emerging as a potential winner amid all the drama. Gene Munster, managing partner at Deepwater Asset Management, noted that the Big Three pay their workers 38% more than Tesla (TSLA) and that gap is likely to widen if labor talks are fruitful.
Other non-union automakers poised to benefit from the disruption include Toyota (TM), Honda (HMC) and Mercedes (OTCPK:MBGAF).
In premarket trade: Ford (F) -2.1%, GM (GM) -1.9%, Stellantis (STLA) -0.1%, Tesla (TSLA) +0.4%.
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