Ford Motor Company stock fell in after-hours trading Thursday as the United Auto Workers (UAW) escalated their four-week targeted strike against the Detroit Three automakers by shutting down Ford’s largest plant globally with little warning.
UAW halted production at Ford’s Kentucky truck plant late Thursday, affecting the manufacture of the lucrative pickup trucks, including Ford Super Duty, Lincoln Navigator, and Ford Expedition SUVs. The union cited Ford’s refusal to meet their demands in contract negotiations as the reason behind the strike.
Based on the reports, 8,700 UAW (United Auto Workers) members working at the Kentucky plant have initiated a strike. Their primary demands include higher wages, eliminating a two-tier wage system, and union expansion to battery plants at all three companies.
The decision to halt production at Ford’s most profitable operation, generating $25 billion in annual revenue, poses a significant threat to Ford’s full-year profits.
Ford Motor Company stock experienced a 2% decline in post-market trading, following a 0.4% gain on Wednesday.
In response, Ford Motor (NYSE: F) released a statement condemning the UAW’s actions as “grossly irresponsible.”
This sudden development is not only a blow to Ford but also serves as a warning to General Motors (NYSE: GM) and Chrysler’s parent company, Stellantis (NYSE: STLA). Their wage and benefits proposals fall short of Ford’s, as reported in summaries released by the automakers and the UAW.
UAW President Shawn Fain indicated his willingness to extend strikes to other automakers last Friday. He mentioned the possibility of striking the GM assembly plant in Arlington, Texas, which produces Cadillac Escalade, Chevy Suburban, and high-priced SUVs.
Stellantis is also on high alert as the UAW eyes its highly profitable targets, including Ram pickup truck factories in Sterling Heights and Warren, Michigan, along with two Jeep SUV factories in Detroit.
Two weeks ago, President Joe Biden became the first sitting U.S. president to visit the striking car workers in Michigan. During his visit, he voiced support for the workers’ demands, stating that they “deserve” the wage increases and concessions they seek.