The ongoing strike by the United Auto Workers (UAW) is impacting shares of the Big Three automakers—Ford (NYSE:F), General Motors (NYSE:GM) and Stellantis (NYSE:STLA)—hard. But there were signs of new life today; all three of the Big Three were up following reports that there might be some middle ground to work with and get the UAW back to work.
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The latest reports suggest that the automakers are coming out with compromised contract offers featuring a 30% pay hike over the life of the contract. That’s lower than the 40% that the UAW wanted. However, reports suggest that the 30% pay hike over the contract’s life might be sufficient, as then the UAW would be able to not only satisfy its current members but also start getting unionization efforts in at the electric vehicle shops, which are currently non-union.
The automakers have a whole other reason to bring these negotiations to a close quickly: reputation losses. A study from business intelligence firm Caliber notes that “several reputational metrics” for Ford, General Motors, and Stellantis have all dropped since September 15, when the strike started. That’s having a direct impact: those who responded to the Caliber firm are less likely to buy from the Big Three, as well as recommend them to others or seek employment from them. In fact, 58% of respondents made it clear that they support the striking autoworkers.
Which Auto Stock Will Gain Most?
While all three auto stocks were up in Thursday’s trading, there were clear differences among the trio. Stellantis, the only Strong Buy of the lot, has the lowest upside potential at 23.1% thanks to an average price target of $23.69. Meanwhile, GM offers the best upside potential despite its Moderate Buy status, offering 52.15% gains on its $50.53 average price target.
