Over the weekend, the United Auto Workers (UAW) union successfully reached a tentative labor deal with Stellantis (NYSE:STLA). In contrast, the negotiations with General Motors (NYSE:GM) continued to get ugly, with the union extending the strike to GM’s Tennessee plant. UAW began its targeted strikes at the Big Three auto manufacturers on September 15 and continued to add more plants under the strike. Fortunately, for Ford and Stellantis, the nightmare seems to be over, but GM has yet to find a resolution. The deal with STLA mirrors the one agreed with Ford Motor Co. (NYSE:F) last week.
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Stellantis and UAW End Strike
As per the tentative deal, Stellantis workers would receive an overall 25% salary increment over the contract’s four-and-a-half-year life. Further, the lowest-paid workers will get pay raises of nearly 165% over the contract’s life, including cost-of-living adjustments. Among other benefits, the deal reduces the time taken for a new worker to reach the top wage structure to three years from eight.
As in Ford’s case, the 43,000 striking workers will return to the idled Stellantis plants and resume production while the labor deal is being ratified. Moreover, the UAW has managed to coax Stellantis to reopen a closed assembly plant at Belvidere, Illinois, bringing back the jobs of 1,200 workers. Additionally, Stellantis has agreed to build a battery manufacturing plant next to the Belvidere assembly plant, which will add 1,000 jobs.
General Motors’ Tiff with UAW Continues
The workers at GM’s Spring Hill plant unexpectedly went on strike on Saturday as negotiations with the UAW couldn’t end. The plant is one of GM’s largest, hosting roughly 4,000 workers manufacturing the Cadillac and GMC SUV models. The expanded strike has disappointed GM’s management, which has been actively engaged in reaching a tentative deal and resuming operations. To date, 22,000 GM workers are on strike across Texas, Michigan, Missouri, and Tennessee.
Is Stellantis a Good Investment?
Stellantis indeed has a Strong Buy consensus rating on TipRanks. This is based on 14 Buys versus two Hold ratings. Also, the average Stellantis price forecast of $24.53 implies a nearly 36% upside potential from current levels. Year-to-date, STLA stock has gained 34.8%.
