Ford (F) and GM (GM) both suffered slight hiccups with UAW member votes on tentative contracts, but the automakers and the union are still cautiously optimistic the ratifications will happen.
The UAW revealed members at Ford’s Kentucky Truck Plant and Louisville Assembly Plant, where Ford’s Super Duty trucks and full-size SUVs are assembled, voted down the tentative agreement by 54.5% and 50.4% "no" votes, respectively. However, skilled workers at both those plants overwhelmingly approved of the deal (65.8% and 76.7% respectively).
Of the plants that have voted, Ford’s Kentucky Truck and Louisville Assembly were the first UAW chapters to vote against the deal, adding some uncertainty to the ratification process. That being said, 27 other chapters have voted to approve the deal, with several chapters still outstanding.
On the GM side, the UAW posted on Facebook that Local 598, which represents GM’s Flint Truck assembly plant, voted 51.8% against the tentative deal. The Flint Assembly plant employs 4,746 UAW workers and assembles trucks including the Chevrolet Silverado HD pickup.
"The situation at GM is more serious as a potential threat to ratification at that company than at Ford, though I would not take anything for granted," labor expert Marick Masters, a business professor at Wayne State University's Mike Ilitch School of Business, told Yahoo Finance. "If the contract is rejected at one company, the union will have several decisions to make, including whether to call out a strike, how to deal with maintaining pattern agreements, and determining what they should try to get to satisfy rank and file."
GM shares dipped on Friday following news of the vote. However, per the UAW’s GM vote tracker, 58% of UAW members working at GM plants have approved the the tentative deal thus far.
On the Ford side, the numbers are even stronger: 65.3% of Ford UAW workers have approved the tentative deal, versus 34.7% who have not. Again, not all the plants on both the Ford and GM side have voted.
A tentative contract is ratified if a majority of hourly workers (which includes production and skilled trades) who vote vote in favor of the agreement. There is no possibility of a plant-level strike or negotiation, a source told Yahoo Finance.
While the potential of new labor contracts has investors concerned the Big Three automakers will have a cost disadvantage versus other non-union automakers, this may not be the case. The effects of the UAW’s collective bargaining efforts are now trickling down to other non-union automakers, who are concerned workers may perceive they are not getting paid enough — and may jump ship.
Today, Hyundai announced “a wage strategy” starting in January 2024 that will give its Georgia assembly workers wage increases of 25% by 2028. This follows Honda’s announcement on Friday that it will implement 11% wage increases for its US factory workers, and Toyota’s move a couple weeks back to hike wage by 9% for its hourly and skilled workers.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
