The United Auto Workers (UAW) union initiated a strike against Detroit’s three major automakers following the expiration of their contracts.
The strike, historically unprecedented in its scale, targets Ford Motor Co (NYSE:F), General Motors Co (NYSE:GM) and Stellantis NV (NYSE:STLA).
The core dispute revolves around a wide gap in wage and benefit expectations.
Potential Implications: As attention remains fixated on the Big 3, repercussions of the strike may ripple through the auto suppliers that provide vital components and services to the automakers.
The Biden administration is considering extending emergency financial support to the affected auto suppliers. The exact form of aid is still under discussion, with proposals including potential grants from the Labor Department for impacted workers and preferential loan terms via the Small Business Administration, USA Today reported on Friday.
As Ford CEO Jim Farley said Thursday, the automaker will have to start closing plants within “hours or days” of the strike. Here’s what stocks to watch.
Supplier Overview and Recent Price Action:
Lear Corp (NYSE:LEA)
Services: Supplies seating systems and electronic systems.
Clients: Ford, GM, Stellantis
5-Day Price Action: -2.87%
Denso Corp (OTC:DNZOY)
Services: Produces advanced automotive technology, systems, and components.
Clients: Ford, GM
5-Day Price Action: +0.02%
Magna International Inc (NYSE:MGA)
Services: Offers mobility technology solutions, including body exteriors and structures.
Clients: Ford, GM
5-Day Price Action: -1.13%
BASF SE (OTC:BASFY)
Services: Provides chemicals for automotive coatings and other applications.
Clients: GM
5-Day Price Action: +2.42%
Aptiv PLC (NYSE:APTV)
Services: Delivers software capabilities, computing platforms and networking architecture.
Clients: Stellantis
5-Day Price Action: +0.84%
Adient PLC (NYSE:ADNT)
Services: Produces automotive seating systems.
Clients: GM
5-Day Price Action: -0.34%
Dana Inc (NYSE:DAN)
Services: Supplies drivetrain and e-propulsion systems.
Clients: Ford, GM
5-Day Price Action: -3.47%
Autoliv Inc (NYSE:ALV)
Services: Develops and manufactures automotive safety systems.
Clients: Ford
5-Day Price Action: -3.29%
Nucor Corporation (NYSE:NUE)
Services: Provides steel and steel products.
Clients: GM
5-Day Price Action: -3.42%
Continental AG (OTC:CTTAY)
Services: Produces automotive parts, especially tire systems.
Clients: Ford
5-Day Price Action: -0.83%
While the UAW strike puts a direct spotlight on the Big 3 automakers, the potentially extended ramifications on their suppliers cannot be ignored.
The strike, which began on Friday, affected all three automakers at the GM assembly plant in Wentzville, Missouri; the Stellantis assembly plant in Toledo, Ohio; and the Ford assembly plant in Wayne, Michigan.
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Photo: Shutterstock
