Analyst Note| David Whiston |
In an Aug. 25 note, we said Stellantis is the most likely automaker to suffer a UAW strike when the union’s contracts with each of the Detroit Three end at 11:59 PM Eastern time on Sept. 14. Since that time, UAW president Shawn Fain has said the union will strike any automaker that it does not have a new agreement with. The sides remain far apart on every key issue, so we now expect a strike against all three firms simultaneously (which has not happened previously), starting on Sept. 15. We see 2023 earnings guidance in jeopardy, but we will likely keep our fair value estimates in place until we know what a new contract looks like. We expect a strike to potentially last several months due to the large gap between the UAW’s desired wage increase and the low-double-digit percentage increases already offered, as well as due to the union wanting to reinstate bygone benefits such as pensions, retiree healthcare, and a 32-hour workweek that would force the automakers to hire more workers than it needs.