Title: General Motors and Ford to Reveal Third-Quarter Earnings Amid Ongoing UAW Strikes and Negotiations
In the midst of ongoing strikes and contract negotiations with the United Auto Workers (UAW) union, General Motors (GM) and Ford Motor are set to report their third-quarter earnings and future guidance. These reports carry high stakes, as they have the potential to either fuel the UAW’s argument for more concessions or scuttle Wall Street’s confidence in the automakers, affecting their stock prices.
Analysts are eagerly awaiting GM’s earnings report, which is projected to be at $1.88 per share, while Ford is expected to report earnings of 45 cents per share. However, the impact of the UAW strikes and negotiations on the companies’ near-term earnings and long-term plans, including that of Stellantis, which is also being targeted by the union, is being closely watched.
The UAW has been making use of earnings reports and executive commentary to promote its efforts and collective bargaining. The union argues that if the automakers remain profitable in the third quarter, they should be more accommodating in negotiations. It remains to be seen whether the earnings reports will provide any leeway for concessions from the companies.
The ongoing work stoppages are anticipated to have a more significant impact in the fourth quarter compared to the previous three months. Estimates from JPMorgan suggest that strike costs amounted to $145 million for Ford and $191 million for GM in earnings before interest and taxes during the third quarter. These strike costs are projected to increase significantly in the fourth quarter, potentially affecting the automakers’ plans for electric vehicles and their competitiveness vis-à-vis non-union automakers.
Furthermore, factors such as labor costs are expected to play a crucial role. Labor costs for GM and Ford are predicted to rise to $3,000 to $4,000 per vehicle, as opposed to their competitors’ costs, which average between $2,500 and $3,000 per vehicle. This discrepancy further highlights the significance of the ongoing negotiations and the potentially far-reaching consequences for the domestic auto industry.
Both GM and Ford have made recent offers that include attractive enhancements compared to the 2019 contracts. These offers include 23% wage increases, the reinstatement of cost-of-living adjustments, additional vacation days, and other benefits. The outcome of these negotiations will shape the relationship between the UAW and the automakers for the foreseeable future.
As GM and Ford prepare to unveil their third-quarter earnings amid the ongoing UAW strikes and negotiations, the results carry implications for both the immediate future and the long-term competitiveness of the companies. The relationship between labor and management in the auto industry is on the line, and the decisions made in the coming days will have far-reaching consequences for both parties involved.
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