Advertisement
U.S. markets close in 34 minutes
  • S&P 500

    5,263.36
    +14.87 (+0.28%)
     
  • Dow 30

    39,855.47
    +95.39 (+0.24%)
     
  • Nasdaq

    16,406.81
    +7.29 (+0.04%)
     
  • Russell 2000

    2,124.16
    +9.81 (+0.46%)
     
  • Crude Oil

    83.08
    +1.73 (+2.13%)
     
  • Gold

    2,241.90
    +29.20 (+1.32%)
     
  • Silver

    24.97
    +0.22 (+0.88%)
     
  • EUR/USD

    1.0790
    -0.0040 (-0.37%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2622
    -0.0016 (-0.12%)
     
  • USD/JPY

    151.3980
    +0.1520 (+0.10%)
     
  • Bitcoin USD

    70,737.27
    +1,974.52 (+2.87%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

General Motors (GM) Ultium Cells Workers Vote to Join UAW

In a major move, workers at the General Motors GM and LG Energy Solution joint venture, Ultium Cells LLC, in Ohio, are voting to decide whether they are willing to join the United Auto Workers (“UAW”) union. It is the first time that the UAW union is organizing a major EV battery plant for a Detroit automaker. This will set a precedent for similar multibillion-dollar facilities to spring up.

Expectations are rife that the Ultium Cells workers will vote in support of the UAW’s representation, with President Joe Biden being a strong ally of the union and supporting its decision to bolster its current membership and setting up EV startups.

The organizing vote began on Dec 7 and will end on the night of Dec 8. Nearly 900 workers are participating in the voting. Upon completion, the paper ballots will be mixed and counted immediately, according to the United States Labor Relations Board, which is overseeing the process. Per the board’s rules, both sides have five business days to submit objections to challenge the results. Following that period, the sides can begin talks.

The organizing vote comes after Ultium denied access to organize workers despite the support from GM CEO, Mary Barra, for the right for employees to unionize. Barra and other executives have acknowledged that hourly pay for factory workers at the battery plants should be closer to that of auto supplier workers, which is about $20 or less, rather than traditional assembly line jobs that top out at more than $30 an hour.

Ultium has said that hourly workers currently make between $16 and $22 an hour with full benefits, incentives and tuition assistance. In August this year, 85% of Ultium Cells workers signed union authorization cards. Of the workers, 94% have voted to strike in case General Motors does not recognize them as a union. The Ultium plant in Ohio is the first of at least four U.S. battery facilities for the GM-LG joint venture. The plants are expected to employ thousands of workers in the coming years.

Electric vehicles are believed to usher in a new era of American manufacturing jobs for the UAW. But, at the same time, EV adoption implies reduced jobs and undermines President Biden’s goal of creating 1 million new jobs in the U.S. auto industry. EVs require far fewer parts than vehicles with internal combustion engines, which potentially hurt factory assembly jobs. A 2018 study by the union found that mass adoption of EVs could cost the UAW 35,000 jobs. However, it expects the number to have declined now. A number of EV parts are produced outside the United States, as well as vehicle assembly, where workers are paid significantly lower wages.

Factoring in the concerns, the UAW has taken a cautious stance toward EVs that seeks to ensure that the transition is equitable to American workers and does not cost a great number of jobs. Joint venture battery facilities are crucial for the UAW to grow and add members as top automakers such as GM transition to electric vehicles. The UAW’s push into the battery plants has included several industry biggies but the groundwork is not easy.

The UAW’s total membership of more than 400,000 has grown during the past decade as it diversified its membership, but the figure remains far below its peak of 1.5 million in the late 1970s.

Despite the challenges it has to face, the union’s tireless efforts in giving workers, especially those working at startups, a chance to get represented and voice their opinion throw a glimmer of hope that the need to have fewer workers will be offset to an extent in the race for EV adoption.

Shares of GM have lost 36.3% over a year compared with the industry’s 48.4% decline.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Rank & Key Picks

GM currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked players in the auto space – CarParts.com PRTS, sporting a Zacks Rank #1 (Strong Buy), and Allison Transmission Holdings ALSN and Genuine Parts Company GPC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

CarParts has an expected earnings growth rate of 85% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 72.7% upward over the past 30 days.

Allison has an expected earnings growth rate of 26.1% for the current year. The Zacks Consensus Estimate for ALSN’s current-year earnings has remained constant in the past 30 days.

Genuine Parts has an expected earnings growth rate of 18.1% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 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

Genuine Parts Company (GPC) : Free Stock Analysis Report

General Motors Company (GM) : Free Stock Analysis Report

Allison Transmission Holdings, Inc. (ALSN) : Free Stock Analysis Report

CarParts.com, Inc. (PRTS) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Advertisement