General Motors’ (NYSE:GM) Canadian workers went on strike after the automaker failed to reach a deal with the labor union Unifor by the midnight deadline on Monday. The strike by Unifor adds to General Motors’ labor woes due to the ongoing UAW strike in the U.S. Separately, GM said that it is laying off additional workers due to the UAW strike, affecting the company’s sixth major plant.
GM’s Labor Woes
About 4,300 GM workers represented by Unifor walked off their jobs at the Oshawa assembly complex, the St. Catharines powertrain plant, and the Woodstock parts distribution center in Canada. Unifor National President Lana Payne said that the company continues to fail to meet its demands for pensions, income support for retirees, and initiatives to transition temporary workers into permanent, full-time roles.
Last month, Ford (NYSE:F) avoided a strike at its Canadian plants by signing a tentative deal with Unifor, agreeing to 15% salary hikes over a three-year contract period, including a 10% raise in the first year.
Impact of the UAW Strike
The UAW strikes at GM, Ford, and the plants of Chrysler-maker Stellantis (NYSE:STLA) are significantly impacting the operations of the Detroit automakers and causing additional layoffs. On Monday, General Motors temporarily removed 70 employees at its Lansing, Michigan, stamping plant and about 70 additional workers at the Toledo, Ohio, plant. Overall, 2,300 GM workers are now hit by the UAW strike.
Like GM, Ford and Stellantis also announced additional layoffs. On Monday, Stellantis removed 520 workers at its Trenton, Michigan, engine plant and 50 workers at an Indiana casting plant, citing storage constraints. Meanwhile, Ford said that it laid off another 70 workers at its Michigan plant, bringing the total layoffs to 1,865 employees since the strike commenced on September 15.
The latest company facing the UAW’s ire is the Volvo Group (OTCMKTS:VLVLY). Nearly 4,000 workers represented by the UAW union went on strike at Volvo’s Mack Trucks plants in Pennsylvania, Maryland, and Florida after 73% voted down a proposed five-year contract offer. The proposed deal rejected by the workers included a 19% pay hike, a $3,500 ratification bonus, enhanced retirement benefits, additional vacation for some workers, and other benefits.
Is General Motors a Good Stock to Buy?
Given the ongoing turmoil, Wall Street has a Moderate Buy consensus rating on GM stock based on eight Buys, five Holds, and two Sells. The average price target of $48.87 implies about 58% upside potential. Shares have declined 8% year-to-date.
