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The strike-ending labor agreements between the United Auto Workers and the Detroit Three auto makers aren’t a done deal yet.
Ford Motor
(ticker: F) production workers at the Louisville assembly and Kentucky truck plants voted against the proposed contract late Sunday. The UAW Local 862 union said about 55% of production workers voted against the deal, while 69% of skilled trades workers voted for the new contract, in a post on Facebook. The overall split for the union local was 46% yes and 54% no.
That isn’t necessarily a bad result, and could be seen as good news. Only 37% of the local chapter’s members voted in favor of the new labor deal in 2019. And 35% voted yes in 2015.
The process of ratifying these agreements is playing out across the union’s chapters. The majority of workers at each auto maker’s union needs to approve the deals for them to be ratified. Ratification has been a slow process so far, possibly because the union agreed to go back to work while the vote was happening.
In 2019, when the UAW was on strike at
General Motors
(GM), the ratification process took less than two weeks and workers remained on strike throughout the voting process. Ford and the UAW reached a tentative labor agreement on Oct. 26, almost three weeks ago. GM and Chrysler-parent
Stellantis
(STLA) reached deals soon after.
Investors might be a little nervous about the result in Kentucky. Ford stock was down 0.6% while the
S&P 500
was flat and the
Dow Jones Industrial Average
was up 0.1%.
Before the Kentucky vote, the Ford votes had been going well—with more than 70% of members approving the new deal, according to union data. About 25,000 union members have to vote yes to ratify it. With the Kentucky votes tallied, some 16,000 votes are a yes with about 8,500 a no.
UAW workers at GM’s Flint, Mich., plant voted to reject the tentative contract agreement, too, at the end of last week. UAW Local 598 said 53% of production workers voted against the deal, but 65% of skilled trades workers were in favor of it. Overall, 52% voted against the proposal.
Separately, production workers at the Flint engine operations plant voted against the deal, but four other units were strongly in favor, UAW Local 659 said.
The first vote of UAW Local 900 workers at Ford’s Michigan assembly plant was overwhelmingly in favor of the deal, with 82% accepting the proposal.
It is unlikely the deal will be rejected. But any no vote at key local unions will have investors watching for more signs of doubt. Plus, votes at
Stellantis
and GM are still to come.
Coming into Monday trading, Ford stock has fallen about 34% since the start of July, when labor issues started to weigh on investor sentiment. Ford also posted disappointing third-quarter earnings in October, contributing to the decline.
Write to Al Root at [email protected] and Callum Keown at [email protected]
Read the full article here
