It seems like the worst is not yet over for legacy automaker General Motors (NYSE:GM). The voting on the tentative contract between GM and the United Auto Workers (UAW) union is not going as expected. Several union workers at GM’s plants have rejected the proposed four-and-a-half-year labor contract, putting a dent in GM’s dreams of restarting production in full swing.
On Tuesday, 68% of the union workers at GM’s Spring Hill plant in Tennessee voted against the contract. Similarly, a majority of unionized workers at GM’s Flint plant and suburban Detroit plant rejected the tentative labor deal. To date, a third of ballots at General Motors plants have been cast, with rejections slightly in the lead. The final vote results are anticipated to arrive within a week or two, and the final verdict will be based on the overall voting count.
Although workers returned to their plants as soon as the tentative deal was locked, ratification from the union workers will be the final word. If the votes go against the deal, there is a possibility that GM will have to renegotiate the terms of the deal. Also, there is a possibility that the workers might revert to engaging in strikes.
What is the Future of GM?
Wall Street remains cautiously optimistic about GM. On TipRanks, the stock has a Moderate Buy consensus rating based on 11 Buys, five Holds, and one Sell rating. Also, the average General Motors price target of $44.71 implies 58.6% upside potential from current levels. Year-to-date, GM stock has lost nearly 16%.
