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UAW cites 'significant progress' in Ford talks as GM strike continues

Stock Markets Oct 03, 2019 12:41PM ET
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© Reuters. UAW cites 'significant progress' in Ford talks as GM strike continues
 
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By David Shepardson

WASHINGTON (Reuters) - The United Auto Workers union said on Thursday it has made "significant progress" in contract talks with Ford Motor Co (N:F), even as a strike at General Motors Co (N:GM) is in its third week.

The UAW agreed to extend contracts with Ford and Fiat Chrysler Automobiles NV (MI:FCHA) as it focused first on GM. About 48,000 UAW members at GM went on strike on Sept. 16 seeking higher pay, greater job security, a bigger share of the leading U.S. automaker’s profit and protection of healthcare benefits. [nL2N2680Z7]

JP Morgan auto analyst Ryan Brinkman estimated in a research note this week the strike has cost GM over $1 billion but it may be able to recover some lost profit in the fourth quarter. He said GM is losing $82 million a day.

GM shares are down nearly 12% since the strike began.

LMC automotive estimated on Thursday GM has lost production of 118,000 vehicles through Oct. 2. But GM has 81 days' supply of vehicles in stock for the United States, and 90 days' worth of Chevrolet Silverado pickup trucks.

GM said earlier this week the strike by U.S. workers forced it to halt production at its pickup and transmission plants in Silao, Mexico, resulting in temporary layoffs of 6,000 workers. [nL2N26M1C7]

The UAW on Tuesday rejected a new comprehensive offer from GM and the sides have been exchanging counterproposals over the last few days.

The statements on "comprehensive proposals" indicate the talks have shifted into a higher gear as the dispute is taking a toll on both the automaker and striking UAW workers, whose individual compensation of $250 a week from the union strike fund is a fraction of their normal pay.

Both sides face broader risks should the U.S. economy slow down. Data released on Tuesday showed the U.S. manufacturing sector contracted in September to its weakest level in more than a decade. Stocks fell broadly on the report. [nL3N26M3M6]

The strike had previously forced GM to lay off at least 2,000 Canadian workers and temporarily close an engine plant in Mexico. Many suppliers have halted or scaled back some operations.

The UAW said 18 out of 20 Ford subcommittees have reached tentative agreements or made significant progress. Ford said it is focused on "reaching a fair agreement with the UAW that allows the company to be more competitive so we can continue to preserve and protect good-paying manufacturing jobs."

UAW cites 'significant progress' in Ford talks as GM strike continues
 

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