The United Auto Workers (UAW) is contemplating a departure from its traditional strike tactics by opting for targeted strikes at specific Ford Motor Co., General Motors Co., and Stellantis NV plants. Among the most promising candidates for these strikes are the factories responsible for manufacturing America's most sought-after vehicles.

Over the years, the production of high-margin Ford F and GM SUVs and pickup trucks has mostly shifted to the United States, while auto manufacturers have relocated the production of more affordable sedans and compacts to other locations.

According to Citi analyst Itay Michaeli, the two leading contenders for targeted strikes are GM's plant in Arlington, Texas, and Ford's truck plant in Louisville, Kentucky.

  • GM Plant in Arlington, Texas: This facility produces the Chevy Suburban, the GMC Yukon, and the Cadillac Escalade. Back in June, GM announced an investment exceeding $500 million in this plant, aiming to fortify their position in the full-size SUV business.

  • Ford Truck Plant in Louisville, Kentucky: The Kentucky truck plant is responsible for manufacturing the F-Series Super Duty vehicles, as well as the Ford Expedition and the Lincoln Navigator.

Additional U.S. truck plants worth mentioning include:

  • Ford's Dearborn, Michigan plant, where they produce F-150 pickup trucks along with their all-electric counterpart, the Lightning.

  • GM's Flint, Michigan plant, which is the company's longest-running factory in the United States and specializes in manufacturing heavy-duty versions of the Chevy Silverado and GMC Sierra pickup trucks.

  • GM's Fort Wayne, Indiana plant, dedicated to constructing Chevy Silverado 1500s and GMC Sierra 1500s.

The UAW's potential shift towards targeted strikes reflects a strategic reevaluation of their approach to labor disputes. By focusing on specific plants that produce highly profitable vehicles, the UAW aims to maximize their impact and achieve favorable outcomes for their members.

Labor Tensions at Stellantis Could Lead to Targeted Strikes

Stellantis, the parent company of popular automotive brands such as Jeep, Dodge, Ram, and Chrysler, is facing potential labor unrest as the contracts between the automaker and the United Auto Workers (UAW) union are set to expire. While most Stellantis vehicles are produced in the United States and Mexico, there is growing concern over potential strikes that could disrupt production.

According to reports, the UAW leadership is contemplating a strategy of targeted strikes at select plants. This approach could lead to a more prolonged labor dispute if implemented. In the past, the UAW has typically focused on striking one company to safeguard its strike fund and enhance its picket-line capabilities.

To bolster their negotiating position, the UAW has recently raised strike pay to $500 per week for each member, and the union's strike fund currently sits at over $825 million. These financial resources could support workers in the event of a prolonged strike.

As labor negotiations continue, investors are monitoring the situation closely. So far this week, Ford and General Motors have seen modest gains of 4% and 3% respectively, compared to a 0.5% rise in the S&P 500 index. In the year-to-date, Ford has experienced a 10% increase in share value, while GM shares have advanced by 0.9%. However, both companies have underperformed the broader market's 17% increase.

The outcome of the labor negotiations between Stellantis and the UAW remains uncertain, but the potential for targeted strikes adds another layer of complexity to an already challenging situation for both parties involved.

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