Labor Agreements between UAW and Detroit Three Automakers Face Uncertainty

The recently proposed labor agreements between the United Auto Workers (UAW) and the Detroit Three auto makers still hang in the balance. Despite optimistic negotiations, Ford Motor employees at the Louisville assembly and Kentucky truck plants have voted against the contract.

According to the UAW Local 862 union, around 55% of production workers rejected the proposed deal, while 69% of skilled trades workers favored it. Overall, the union local experienced a split, with 46% voting in favor of the contract and 54% voting against it. Though this division may initially seem unfavorable, it denotes a significant improvement compared to previous agreements. In 2019, only 37% of members supported the labor deal, while in 2015, that number stood at just 35%.

The ratification process for these agreements is unfolding across all union chapters. Approval from the majority of workers at each automaker’s union is required for the deals to be formally ratified. However, the process has been slower this time, likely because the union decided to resume work while the vote was underway.

Comparing the current situation to the 2019 strike at General Motors (GM), where workers remained on strike throughout the voting process, the ratification process took less than two weeks. In contrast, Ford and UAW reached a tentative labor agreement almost three weeks ago on October 26th. Soon after, GM and Stellantis (STLA), parent company of Chrysler, also reached agreements.

The outcome in Kentucky has raised some concerns among investors. Ford stock saw a slight decline of 0.6%, while the S&P 500 remained flat and the Dow Jones Industrial Average experienced a marginal increase of 0.1%. Despite this uncertainty, it is important to note that the final verdict on the labor agreements between UAW and the Detroit Three automakers is yet to be determined.

Ford Votes on New Deal in Kentucky

The voting process for the new deal between Ford and the United Auto Workers (UAW) has been progressing positively, with over 70% of union members giving their approval, according to union data. A total of 25,000 union members need to vote in favor of the deal for it to be ratified. Out of the votes counted so far in Kentucky, approximately 16,000 are in favor, while around 8,500 are against.

However, the UAW workers at GM’s Flint, Mich., plant have voted to reject the tentative contract agreement. UAW Local 598 reported that 53% of production workers voted against the deal, although 65% of skilled trades workers were in favor. Overall, 52% of the workers voted against the proposal.

In addition to this, the workers at Flint’s engine operations plant have also voted against the deal. Nevertheless, four other units expressed strong support. UAW Local 659 confirmed this split.

On a positive note, the first vote from UAW Local 900 workers at Ford’s Michigan assembly plant overwhelmingly favored the deal. A significant 82% of workers accepted the proposal.

Despite these differing results, it is unlikely that the deal will be rejected. However, any dissenting votes from key local unions will certainly make investors more cautious. It is also important to note that Stellantis and GM have yet to announce their votes.

Ford’s stock has suffered a decline of approximately 34% since July due to labor issues and disappointing third-quarter earnings. Investors will be keeping a close eye on any further signs of doubt.