Ford Faces Crippling Strike
Ford faces a strike by the United Auto Workers (UAW) that could cripple it financially and set it back in its critical race to become an important player in the electric vehicle (EV) market. Rival Tesla does not face either of these. It does not have union workers, and its EV production continues to grow. This year, it will launch its Cybertruck, competing with Ford’s EV flagship, the F-150 Lightning. Today, Ford leads that race, but a strike could erase that. Ford’s ambitions for EVs are already behind schedule. (These are America’s least reliable new cars.)
Below is what the press has to say about Ford’s problems and those of other members of The Big Three: General Motors and Stellantis.
The Wall Street Journal reports that, just as a strike may start, Ford has profit problems because EVs have little or no margins. At the same time, the UAW has targeted the high earnings Ford enjoyed for its legacy fossil fuel models. “In the short run, a factory walkout would threaten to disrupt Detroit’s rollout of several new EV models and potentially drain billions of dollars in profits.”
The Detroit News reports that the UAW may target all three companies to cripple the entire industry and quickly bring Ford and the others to the negotiating table. And the ripple effect would pull down other parts of the economy. “A strike against all three major automakers — General Motors Co., Stellantis NV and Ford Motor Co. — could cause damage not only to the industry as a whole but also to the Midwest and even national economy, depending on how long it lasted.”
Get Our Free Investment Newsletter
Ford’s margins would be quickly damaged because it depends on the F-150 for 38% of its unit sales in the United States. According to NBC, “The Ford F-Series is one of the Detroit automaker’s most profitable automobiles and has been the best-selling vehicle in the U.S. for more than 40 years.”
ALSO READ: America’s Most Hated Companies
Tesla could be the largest beneficiary of any strike. AutoBlog reports: “But production slowdowns from a work stoppage combined with potentially large labor cost increases could put the brakes on Detroit’s race to beat Tesla at the EV game.”
Ford’s future, which was bright recently, and particularly promising as it moved to the EV sector, could be damaged for months.
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Source: Read Full Article