Ford (F) & UAW Reach Accord to Avoid Strike at Kentucky Plant
U.S. legacy automaker Ford F and the United Auto Workers (UAW) have reached a tentative agreement for the Kentucky Truck Plant, avoiding a strike that could have affected approximately 9,000 workers. The resolution comes after more than five months of negotiations following the local contract expiration.
The strike notice issued by the UAW on Feb 16 over local contract concerns, including health, safety and skilled trades jobs, spurred urgency in negotiations. Evan Palmer, a UAW representative involved in the negotiations, highlighted key hurdles such as in-plant nurse staffing levels and ergonomic issues. These challenges, alongside efforts to enhance the culture in skilled trades, were addressed in the tentative agreement. The deal’s ratification process is scheduled for Feb 28-Mar 1.
The resolution at the Kentucky plant follows Ford CEO Jim Farley's remarks about the impact of the strike at the plant in the fall. That strike marked the first targeted action at the truck factory during UAW's 2023 contract negotiations. At that time, Ford estimated the Kentucky plant's annual revenues to be approximately $25 billion, representing a significant portion of the company's global revenues for 2023. The six-week UAW strike at Ford in 2023 resulted in a $1.7 billion loss for the automaker.
The Kentucky plant, known for producing profit-heavy Ford Super Duty pickup trucks, Ford Expedition and Lincoln Navigator SUVs, plays a pivotal role in Ford's operations. The avoidance of a strike ensures continuity in production and underscores Ford's commitment to maintaining stable labor relations ahead of significant product launches in 2024.
A dozen local contracts remain under discussion across Ford, General Motors and Stellantis. The successful resolution at the Kentucky plant sets a positive precedent for future negotiations, highlighting the efficacy of collaborative approaches in addressing workforce concerns and maintaining operational continuity in the automotive industry.
Zacks Rank & Key Picks
Ford currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are General Motors GM, PACCAR PCAR and Allison Transmission ALSN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GM’s 2024 sales and earnings suggests year-over-year growth of 1.9% and 17.2%, respectively. The EPS estimates for 2024 and 2025 have improved by $1.26 and $1.70, respectively, in the past 30 days.
The Zacks Consensus Estimate for PCAR’s 2024 and 2025 EPS has moved up by 36 cents and 25 cents, respectively, in the past 30 days. The trucking giant surpassed earnings estimates in the trailing four quarters, the average surprise being 17.07%.
The Zacks Consensus Estimate for ALSN’s 2024 sales indicates year-over-year growth of 2.6%. The EPS estimate for 2024 and 2025 has improved by 16 cents and 15 cents, respectively, in the past seven days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ford Motor Company (F) : Free Stock Analysis Report
PACCAR Inc. (PCAR) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
Allison Transmission Holdings, Inc. (ALSN) : Free Stock Analysis Report
