Ford (F:NYE) faces a potential strike in Canada, similar to the ongoing UAW strike in the U.S. Canadian union Unifor, which represents workers at Ford, General Motors (GM:NYE), and Stellantis (STLA:NYE), has listed demands, such as higher wages, pension protection, and more investment in Canadian manufacturing. They’re also concerned about job security as the auto industry shifts to making electric vehicles (EVs). This article will highlight the impact of this ongoing strike on Ford stock forecast.
Unifor Takes Center Stage:
Lana Payne, President of Unifor, has vocally asserted that, with U.S. workers currently on strike, this is a fortunate moment to push for their demands by brandishing the strike threat. Unlike the UAW’s approach, Unifor in Canada has chosen to target Ford as the initial point of contention. Approximately 5,700 workers stand firm to stage a walkout from Canadian plants once the contract expires, which occurred at midnight on September 18.
While discussions have been described as “constructive,” significant headway remains elusive. According to a recent Reuters report, Unifor has granted a 24-hour extension to the contract negotiation deadline, affording Ford one last day to broker a mutually beneficial agreement and avert an impending strike.
Unifor’s Impact on Ford’s Ontario Operations:
Unifor’s workforce spans Ford’s Ontario assembly plant and two engine-manufacturing facilities located just across the Detroit River. The Ontario plant is responsible for producing Ford Edge and Lincoln Nautilus SUVs, while the other two plants specialize in crafting V-8 engines for the iconic Mustang and F-150 pickup trucks. Notably, Ford’s stock experienced a 2.1% dip on September 18, though it has enjoyed a robust 15% year-to-date gain.
The Big Three and UAW Strike Developments:
Across the border, nearly 12,700 members of the UAW have completed their fourth day of a targeted strike against the Big Three automakers. Striking workers have formed picket lines outside manufacturing facilities, with some non-striking employees also participating in rallies. Ford’s recent layoff of 600 workers on September 15 has been attributed directly to the strike’s repercussions.
Ongoing Labor Dispute:
Simultaneously, negotiations have resumed, and the union may strike at more plants on September 22 if their requests are not fulfilled. Presently, detailed information on the ongoing negotiations remains undisclosed. The UAW continues to provide $500 per week in compensation to both striking employees and those who have been laid off due to the ongoing labor dispute.
Impact on Bottom Lines:
According to estimates by Wells Fargo analysts, these new agreements could potentially burden the companies with costs ranging from $700 million to $1.2 billion over the four-year contract duration.
If the union’s request for a 30% wage hike and adjustments for the cost of living is approved, these expenses could potentially reach an astonishing $1.7 billion to $2.4 billion.
Ford Stock Forecast:
Amidst these labor negotiations, the Ford stock forecast remains a topic of interest. Based on predictions from 12 analysts, the average target price stands at USD 14.73 over the next 12 months.
Furthermore, the average analyst rating for the company is “Buy.” Stock Target Advisor’s analysts are “Neutral,” based on 7 positive signals and 7 negative signals.
Ford Stock’s Recent Performance:
As of the latest closing, Ford Motor Company’s stock price rested at USD 12.34, having experienced a 0.98% increase over the past week, a 3.18% rise over the past month, and a 16.17% decline over the past year.
Conclusion:
The Ford Motor Company faces a critical situation with Canadian workers on the verge of a potentially significant strike. They are seeking improved wages, pension security, and increased investments amidst the ongoing shift toward electric vehicles in the automotive industry. The outcome of these negotiations holds substantial influence over Ford’s future. Concurrently, the effects of the UAW strike in the United States introduce another layer of uncertainty to the current automotive landscape. Analysts are closely monitoring these developments, while investors and stakeholders eagerly anticipate a resolution that will shape the trajectory of Ford’s stock in the months ahead.
