US Automakers Continue with Layoffs In the Wake of more UAW Strike Walkouts

In response to the United Auto Workers (UAW) strike, the US auto industry is grappling with factory worker layoffs and work stoppages.

Widening Strike and Employee Layoffs

The UAW expanded its strike on Friday, encompassing two additional Ford factories and another GM facility. This extension resulted in approximately 500 worker layoffs, impacting Ford facilities in Chicago and Ohio, as well as GM plants in Indiana and near Cleveland. The total layoffs attributed to the strike now exceed 6,000, with many directly linked to the ongoing labor dispute.

Crucial Negotiation Points

Negotiations between the UAW and automakers are underway, but significant differences persist, especially regarding wage increases. Auto companies have proposed a 20% wage hike over the four-year contract, whereas the UAW seeks higher wages, around the mid-30% range. The UAW also advocates for additional terms, such as cost-of-living adjustments and improved retirement benefits. Stellantis revised its contract proposal significantly last week, preventing a strike at one of its plants.

Impact on Automakers

The strikes and resulting layoffs have led to the closure of at least five factories and plants nationwide. To avoid a complete work stoppage, the UAW opted for a partial strike, helping to mitigate production disruptions and financial losses for automakers. Collectively, the factories involved in the strike accounted for 16% of vehicles produced in North America until August, according to Wards Intelligence. JP Morgan estimates that GM's third-quarter earnings suffered a nearly $191 million blow, with Ford losing about $145 million. Despite these challenges, GM is projected to report a third-quarter operating profit of $3.2 billion, while Ford's expected profit is $2.5 billion. As of the stock market's opening on Tuesday, shares of all three companies were trading down.

The ongoing UAW strike continues to impact the US auto industry, with ongoing negotiations aimed at resolving key issues and minimizing disruptions in production and profitability.

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