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Ford’s Largest Factory Paralyzed as Uaw Strike Escalates

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Published Oct 12, 2023 01:20PM ET

Ford’s Largest Factory Paralyzed as Uaw Strike Escalates © Reuters.

The United Auto Workers (UAW) union strike, which began on September 15, 2023, has now escalated to Ford (NYSE:)’s largest factory in Kentucky. The factory, responsible for producing Ford Super Duty pickup trucks, Lincoln Navigator, and Ford Expedition SUVs, is a $25 billion operation. As of Thursday, the plant is paralyzed due to the demands of approximately 8,700 workers for higher wages, improved retirement benefits, and union representation at future joint venture battery plants.

Ford, a prominent player in the Automobiles industry according to InvestingPro Tips, has proposed a salary increase of 23%, yet the UAW continues its strategy of keeping Detroit automakers “wounded”. This has led to strikes not only at Ford’s Detroit and Chicago factories but also at other companies such as Volvo (OTC:) Group’s Mack Trucks. The strikes have resulted in temporary layoffs and a 1.8% drop in Ford’s shares on Thursday.

InvestingPro data reveals that Ford’s market cap stands at 48.15B USD and its P/E ratio is 11.69, indicating that despite the ongoing labor dispute, the company remains a significant player in the market. The company’s revenue growth, as of the second quarter of 2023, is 14.72%, demonstrating a robust financial performance.

Ford has criticized the UAW’s decision as “grossly irresponsible”, blaming the union for causing reputational damage and industrial chaos among the Detroit Three. The company argues that the strike has jeopardized not only its operations but also those of a dozen other suppliers.

The UAW expanded its strike unexpectedly under the leadership of President Shawn Fain. This strategic shift has resulted in an escalation that now involves 34,000 workers or 23% of UAW members. The strikes began in mid-September over expired contracts and have since grown in intensity.

Despite these developments, Wall Street maintains cautious optimism towards Ford. The average price target for Ford stock is currently $15.27, even after a 2% decline in the stock due to the expanded strike. This optimism is echoed by InvestingPro Tips, which predicts that the company will be profitable this year, and has maintained dividend payments for 12 consecutive years. For more insights and tips, visit InvestingPro, which lists numerous additional tips to guide your investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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