Bill Ford's Plea To End UAW Strike, Analysts See Near-Term Buying Opportunity On US Automaker Stocks

Bill Ford, the executive chair of Ford Motor Co F, warned Monday the potential impact of the continuing strike threatens not only Ford’s future but also that of the wider American automotive industry.

During a press conference at the company’s Rouge Complex in Detroit, Ford, who has been involved in other United Auto Workers (UAW) negotiations since 1982, encouraged union leaders and members to work together with the company to reach a resolution, CNBC reported.

He also advocated elevating the conversation surrounding the contract talks, suggesting the real issue was not between Ford and the UAW, but against overseas competitors such as Toyota Motor Corp. TM, Honda Motor Co Ltd. HMC, and emerging Chinese companies, such as NIO Inc. – ADR NIO and LI Auto Inc. LI.

UAW President Shawn Fain pushed back, saying if Ford wants to be seen as a true American car company, it should offer better pay and benefits.

Last week, Ford revealed its challenges in contract negotiations with the UAW union, suggesting it might have reached its financial limit for concessions.

Analysts Turn Bullish On Automakers Stocks

As reported by MT Newswires, RBC Capital Markets stated on Monday the ongoing UAW strike opened up a short-term opportunity for purchasing auto-related stocks.

Despite this, analysts believe the consensus estimates for 2024 still appear overly optimistic.

This strike, initiated by the labor union representing employees at three major automakers, commenced on Sept. 15. The negative sentiment stemming from it has, in the eyes of RBC analysts Tom Narayan and Piral Dadhania, presented near-term investment opportunities, particularly after the work stoppage.

Over recent weeks, both negotiating parties have been moving closer to a potential resolution, as indicated by the analysts. Drawing a parallel, they point to the six-week General Motors Co GM workers’ strike in 2019 as a comparable reference point.

According to the analysts, the concerns surrounding the UAW strike may be exaggerated, and any negative effects should be offset by pent-up consumer demand and improvements in the supply chain.

Ford Motor Co.’s shares have declined by 6% since the strike began, showing better performance compared to the 12% drop experienced by General Motors but lagging behind Stellantis NV STLA, which has seen a 3.5% increase in its stock value.