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After extensive negotiations and a seven-week strike, the United Auto Workers (UAW) union reached tentative agreements with Detroit 3 automakers — General Motors GM, Ford F and Stellantis STLA. But despite achieving record contracts with the auto biggies, not all UAW members are satisfied. As of the latest updates, the agreements are being voted on by union members, with varying levels of support across different automakers.
While GM and F carry a Zacks Rank #3 (Hold) each, STLA has a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
At three key GM assembly plants, representing 21% of the company's 46,000 employees covered by the UAW, the proposed contract has faced rejection. Specifically, 61% of the workforce at the Lansing Delta Township plant in Michigan, responsible for producing Buick and Chevrolet crossovers, voted against the agreement. In Spring Hill, TN, a plant manufacturing Cadillac and GMC crossovers saw even higher opposition, with 67.5% rejecting the deal. Additionally, GM's Flint, MI, truck plant reported 52% against the agreement. A few smaller GM facilities also recorded votes against the pact.
Ford has seen a similar trend, with more than 54% of members at its Kentucky Truck Plant voting against the agreement. Stellantis, on the other hand, is witnessing stronger support, with approximately 82% of members favoring the contract so far.
The discontent among the union members, especially at General Motors and Ford, stems from various factors. Long-serving employees fear they might not benefit as much as newer ones, especially regarding retirement benefits. There's also skepticism about the contract language and distrust due to past corruption scandals involving former union leaders. Additionally, inflated expectations set by UAW President Shawn Fain regarding significant wage increases and the elimination of employment "tiers" have raised dissatisfaction.
The UAW's tentative agreements have indeed made notable progress, including a 25% wage increase, faster progression to top wages (from eight to three years) and significant new investments, including for battery workers. However, the agreements have fallen short in several areas, such as delivering a 40% general wage increase, which the UAW had called for, and eliminating wage and benefit tiers. The agreements also failed to reduce the workweek to 32 hours and lacked comprehensive post-retirement health care and traditional pensions for all employees.