The strike-ending labor agreements between the United Auto Workers and the Detroit Three auto makers may not be a done deal.
It isn’t time to worry yet, but investors still need to watch what UAW members are doing.
Ford Motor
(ticker: F) production workers at the Louisville assembly and Kentucky truck plants voted against the proposed contract late Sunday. The UAW Local 862 union said 55% of production workers voted against the deal, while 69% of skilled trades workers voted for the new contract, in a post on Facebook.
The local branch didn’t reveal the overall percentage result, but the majority of workers are in production. The Local and the UAW didn’t immediately respond to a request for comment about the vote.
The majority of workers at each auto maker need to approve the deals for them to be ratified. Ratification has been a slow process so far, possibly because the union agreed to go back to work while the vote was happening. In 2019, when the UAW was on strike at
General Motors,
the ratification process took less than two weeks. Ford and the UAW reached a tentative labor agreement on Oct. 26, almost three weeks ago.
Investors aren’t reacting much to the no vote. Ford stock was down 0.4% while the
S&P 500
was rising 0.1% and the
Dow Jones Industrial Average
was up 0.3%.
Before the Kentucky Truck Plant result, the Ford vote had been going well—with more than 70% of the votes approving the new deal, according to Union data. About 25,000 Union members have to vote ‘yes’ to ratify it. Including the new Kentucky Truck results, some 17,000 positive votes are in against roughly 10,000 ‘no’ votes.
The UAW will eventually reveal the final results but some local union branches have been disclosing theirs.
UAW workers at GM’s Flint, Michigan plant voted to reject the tentative contract agreement, too, at the end of last week. The UAW Local 598 union said 53% of production workers voted against the deal, yet 65% of skilled trades workers were in favor of it. Overall, 52% voted against the proposal.
Separately, production workers at the Flint engine operations plant voted against the deal but four other units were strongly in favor, UAW Local 659 said.
The first vote, of UAW Local 900 workers at Ford’s Michigan assembly plant, was overwhelmingly in favor of the deal with 82% accepting the proposal.
It’s unlikely the deals will be rejected. But the ‘no’ vote at some key Union locals will have investors watching for more signs of doubt with results at
Stellantis
(STLA), Ford, and GM still to come.
Coming into Monday trading, Ford stock has fallen about 34% since the start of July, when labor issues started to weigh on investor sentiment. Ford also posted disappointing third-quarter earnings in October, contributing to the decline.
Write to Callum Keown at [email protected], and Al Root at [email protected]
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