Ford Motor Co. became the latest strike target for the United Auto Workers after members walked out of its largest plant, a highly profitable pickup factory in Kentucky.
The union announced the surprise walkout by 8,700 workers at Ford’s Kentucky Truck Plant in a post on social media Wednesday evening. The plant generates $25 billion a year in revenue, making the higher-priced Super Duty versions of F-Series pickups and Lincoln Navigator and Ford Expedition large sport-utility vehicles.
Ford shares fell 2.8% Thursday to $11.91 as of 9:35 a.m. in New York. The stock has declined more than 20% since early July amid uncertainty about labor-contract negotiations.
Some analysts view the move as a sign that progress in the contract talks is imminent. While the shift in the tone is negative, “pressure was always needed to force a deal,” Chris McNally, an Evercore ISI analyst, wrote in a research note to clients.
Similarly, Colin Langan, a Wells Fargo analyst, said the UAW’s tougher tactics may signal an end game is near. “We think this escalation is a sign that the UAW could be close to a contract proposal with Ford in the next 1-2 weeks,” he wrote in a note.
The timing of the move breaks with prior expansions of the almost monthlong strike, which UAW President Shawn Fain had been announcing in scheduled Friday briefings. The union said in an emailed statement that the strike against the Kentucky plant was called “after Ford refused to make further movement in bargaining.”
Fain is scheduled to update his membership in a public livestreamed briefing at 10 a.m. local time in Detroit on Friday.
The union requested a new economic offer from Ford after talks this week had centered on future workers at battery plants and improving retirement security, according to a company official familiar with bargaining, who wasn’t authorized to speak publicly. Ford last week proposed a 23% raise, which Fain said on Oct. 6 was the “top offer” that the UAW had received from Ford, General Motors Co. or Stellantis NV.
When Ford failed to go higher in a 5 p.m. meeting Wednesday, Fain stood up and said: “If there’s not a better offer, then you just lost KTP,” according to the company official.
The Kentucky Truck Plant is one of the biggest auto factories in the world. In an emailed statement after the strike was called, the company called the union’s decision “grossly irresponsible” and said it poses “serious consequences for our workforce, suppliers, dealers and commercial customers.”
“This work stoppage will generate painful aftershocks — including putting at risk approximately a dozen additional Ford operations and many more supplier operations that together employ well over 100,000 people,” the company said in its statement.
The strike expansion is the UAW’s boldest move yet since walkouts began at Detroit’s three legacy automakers on Sept. 15. The Ford workers in Kentucky join about 25,000 other UAW members who’ve already idled five assembly plants and 38 parts-distribution facilities.
Fain is taking an unprecedented approach to contract negotiations and has been raising pressure on the automakers by threatening to expand the strike to new plants each week if talks aren’t moving forward.
— By Keith Naughton (Bloomberg)