The automobile strike in the United States has left a large bill for the big three of Detroit. Companies have lost production and sales. The third quarter accounts of General Motors and Ford presented last week have certified this, awaiting publication by Stellantis this week. In addition, companies have suffered harsh punishment on the stock market. In six weeks of strike they have lost some 22,000 million dollars in value on the stock market (about 20,850 million euros).
Ford and Stellantis reached agreements with the unions last week that involve strong salary increases and other labor concessions that will affect the companies’ cost structures. Negotiations with General Motors also seemed on track, but they went awry at the last minute and the United Auto Workers union decided this Saturday to expand the strike to a new factory to increase pressure. The 4,000 workers at the Spring Hill (Tennessee) plant, which assembles Cadillac SUV models and manufactures engines used to assemble cars in other plants of the group, have joined the strike.
General Motors has offered to match the minimum 25% increase in four and a half years that workers at Ford and Stellantis have achieved, but the negotiation has stalled in other aspects. In the two agreements reached, the increase is accompanied by other compensation for the increase in the cost of living, a relaxation of the double salary scale, guarantees of job security and other concessions with which workers recover for the sacrifices they made in the Great Recession to save companies. So its viability was threatened. They were now living in a time of record sales and profits.
The two companies that have suffered the greatest stock market punishment are Ford and General Motors, with drops of around 20%, while Stellantis, less dependent on the US market, has resisted the rate better and its price has only fallen 4% in the six weeks of conflict. The direct cost of the strike does not weigh as much as the change in cost structures and the loss of profitability that the new agreements represent for the companies, at a time when the transition to electric cars also requires heavy investments.
Since September 14, the day before the start of the strike, Ford shares have suffered a 21% drop on the stock market, from $12.62 per share to $9.96. With this, it has lost about 10.6 billion dollars in market capitalization, up to the 39.9 billion that the company is now worth. Ford announced on Thursday that it was withdrawing its profit forecast for the whole year to evaluate the impact on its accounts of the strike and the new collective agreement agreed with the motor union, United Auto Workers (UAW). Its results, furthermore, fell below analysts’ forecasts.
General Motors also decided last week to withdraw its forecasts. The company acknowledged that the strike had already left it with an accumulated bill of 800 million dollars in six weeks and estimated the cost of the conflict at 200 million per week if it continued. The company’s shares have fallen 19% on the stock market during the strike period, from $33.66 to $27.22. With this, its stock market value has been reduced by about 8.8 billion dollars, to the 37.3 billion that the company was worth at the close of the session on Friday. The company also announced a slowdown in its investments in electric cars. “We are moderating the acceleration of electric vehicle production in North America to protect our prices, adjust to slower demand growth in the near term, and implement engineering and other efficiency improvements that will make our vehicles less expensive to purchase.” produce and more profitable,” said the CEO when presenting the results.
Stellantis, meanwhile, has better resisted pressure on the stock market. The company, the result of the merger of Fiat Chrysler and PSA, brings together not only the American brands Chrysler, Dodge and Jeep, but also European brands that have great weight in the group such as Fiat, Peugeot, Citroën, Opel, Alfa Romeo , Lancia and Maserati. Its shares, which are listed on various markets, have fallen by just over 4% during the strike, which has meant a drop in capitalization of about $2.6 billion.
The three companies together have a market capitalization of about $140 billion, half that of Japan’s Toyota and far from Tesla, the sector leader by stock market value. The company led by Elon Musk has a market capitalization of about $650 billion.
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