Ford,
General Motors
stocks have largely recovered to pre-strike levels but with the United Auto Workers’ Friday deadline edging closer without signs of progress they could soon be back under pressure.
The UAW has threatened to expand its strike to more plants if Ford (ticker: F),
GM
(GM), and
Stellantis
(STLA) fail to make “serious progress” by the end of the week.
Wedbush analysts, led by Dan Ives, said the dispute was reaching a “fork in the road” and they feared the strikes could be “long and nasty” for the Detroit auto makers.
But there is one clear winner, they said
Tesla
(TSLA), although the Champagne is on ice for now.
The analysts said the company sits in a nonunion position and its biggest potential Detroit EV competitors “now face mounting costs and complexities in the years ahead.”
“This is a growing nightmare situation for GM and Ford as both 313 [Detroit’s area code] stalwarts are in the early stages of a massive EV transformation path for the next decade that will define future success.
If the UAW’s demands for around 40% wage increases are met, it will be a major cost headwind for GM and Ford, and one that could be passed down to consumers through EV prices, they added.
“The costs of EV vehicles out of Detroit is a major advantage going after mass adoption with any $3k, $5k, $7k, etc added to the slew of vehicles coming out would result in demand churn in our opinion.
Ford and GM stocks rebounded Tuesday and are now around the same levels they were before the strikes began in the early hours of Friday morning. GM climbed 1.9% in yesterday’s session, while Ford rose 1.8%.
In contrast,
Tesla
shares are 3.5% down since the UAW made its strike official, although that was largely due to Monday’s 3.3% drop after
Goldman Sachs
lowered third-quarter earnings estimates.
Write to Callum Keown at callum.keown@barrons.com
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