UBS On UAW Contract Negotiations: 'There Is Just A Lot More To Fight If You're Chrysler'
Formal negotiation for contracts of U.S. auto workers for the next four years begin this week between big auto makers and United Auto Workers (UAW) union, according to a recent report from Bloomberg. Fiat Chrysler Automobiles NV (NYSE: FCAU) may be the company that faces the most heat from the union.
Colin Langan, UBS auto analyst, was on CNBC Tuesday to weigh in on this.
Chrysler Has A Much Bigger Risk
"I think if you look at GM and Ford, there is clearly a risk of a short-term strike," Langan began. "One or two days strike from leadership to kind of demonstrate that they're fighting hard for the workers."
He continued, "Chrysler clearly has a much bigger risk and could have a bit longer of a strike just because there is that gap. They are more aligned on the tier-2 workers which the UAW leadership wants to shrink or eliminate. And so, there is just a lot more to fight if you're Chrysler."
Lot In Favor Of UAW
Langan was asked that with the U.S. auto industry projected to sell 17 million units this year , does the United Auto Workers have the kind of leverage right now to get a deal done in their favor.
He replied, "I mean, I think you have a good market. You have GM and Ford at very solid profit levels. So, I think there's a lot in their favor in terms of this contract negotiation, particularly if you look at the last contract; There was no-strike clauses at both GM and Chrysler, so that very much limited the UAW's ability to negotiate."
Latest Ratings for FCAU
|Aug 2016||Jefferies||Initiates Coverage on||Buy|
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.