General Motors (NYSE:GM) has reached a tentative deal with the United Auto Workers (UAW), according to CNBC. The development comes after over six weeks of labor strikes between the UAW and major automakers such as Stellantis (NYSE:STLA) and Ford (NYSE:F).
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While Stellantis had previously struck a tentative deal with the UAW in the U.S., the company is now facing strikes by over 8,000 Canadian workers represented by Unifor. Ford was the first automaker to strike a deal with the UAW.
Reportedly, the negotiations between GM and the UAW took place last night and in the early morning. The deals are said to include 25% wage hikes, similar to Ford’s initial deal. The union’s deals with Ford and Stellantis include a mega 68% hike in starting wages and cost-of-living adjustments for employees. Still, the agreements need to be ratified by UAW members at the auto companies.
The strikes have already cost automakers hundreds of millions of dollars and the new labor deals will mean substantially higher costs in vehicle production. These victories for the striking workers comprise of significant pay raises and improved retirement benefits, following unprecedented simultaneous strikes at the three auto majors.
Which Is the Best Stock in the Auto Sector?
Over the past month, the strikes have had a significant impact on the share prices of these three companies, with Ford shares declining by nearly 20%.
Meanwhile, Wall Street sees major double-digit upside potential for all of these automakers, with General Motors offering the highest potential upside of 66.4%, based on a Moderate Buy consensus rating and a $45.19 average price target.
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