UAW strike ‘almost guaranteed,’ says BofA

BofA notes that the initial contract offers put forth by General Motors (GM) and Ford (F) to the UAW are similar to each other – with comparable wage increases, ratification bonuses, and inflation bonuses- while Stellantis (STLA) is expected to extend an offer to the UAW on Friday, September 8. The initial proposals by GM and Ford “suggest some progress is emerging in negotiations” with the UAW, but the two parties remain “far apart,” says the firm, which adds that it is hearing that the UAW may offer a counter proposal to the OEM offers “shortly.” However, the continues to believe a strike is “very likely” and “almost guaranteed” after the Master Agreement expires next Thursday, September 14. Should this happen, it could drive some headline-related downwards movement to the stocks, but the valuations for GM and Ford suggest the stocks largely reflect the risks of a material strike, BofA tells investors.