Legacy automaker Ford (NYSE:F) has admitted that there are still “significant gaps to close on the key economic issues,” even though the company has made progress in its talks with the United Auto Workers (UAW) union on some issues. Last week, the UAW said that it is seeing “real progress” in its negotiations with Ford.
Meanwhile, as per the latest update, the Canadian labor union, Unifor, on Sunday said that its members voted in favor of Ford’s new three-year contract. Under the new agreement, Ford has offered the Canadian union’s members wage increases of up to 25% over a three-year period, including a hike of 10% in the first year of the agreement and a $10,000 productivity and quality bonus to all employees.
Ford, UAW Try to Address Labor Issues
On Friday, the UAW extended its strike against General Motors (NYSE:GM) and Stellantis (NYSE:STLA) to 38 parts distribution centers across the U.S. However, the union spared Ford from the expanded strike. On September 15, UAW commenced strikes at one plant each of the three Detroit automakers, after the existing four-year labor contract expired.
UAW said workers at additional Ford plants will not join the extended strike as the company improved its contract offer. In a livestream address, UAW President Shawn Fain said that Ford agreed to reinstate cost-of-living increases that were suspended in 2009 and also agreed to enhanced profit-sharing and the right to strike over plant closures.
Nonetheless, Fain said that “serious issues” remain to be addressed by Ford. Meanwhile, Ford issued a statement saying the company is working diligently with the UAW to reach a deal. “In the end, the issues are interconnected and must work within an overall agreement that supports our mutual success,” said Ford.
The UAW is demanding 40% wage hikes, 32-hour work weeks, the return of defined benefit pensions, and the elimination of wage gaps separating newer and older workers. However, the three automakers initially proposed 20% salary increases over the four-year contract period.
Is Ford Stock Buy or Sell?
Wall Street’s Moderate Buy consensus rating on Ford stock is based on seven Buys, eight Holds, and one Sell. The average price target of $15.53 implies 25% upside potential. Shares have advanced about 7% year to date.
