Ford (NYSE:F) stock is on the move Thursday after the automobile manufacturer reached an agreement with the United Auto Workers (UAW) union.
The UAW has been on strike for over a month now as the group’s employees seek higher compensation from the “Big Three” automakers in the United States.
Ford is the first of these companies to come to an agreement with the union. This deal covers a 25% wage increase over the course of four and a half years. It starts with an initial increase of 11% and should result in pay increases of more than 33% when taking into account cost-of-living features.
With this agreement, Ford has avoided disruptions at one of its key plants its Dearborn, Michigan. Members of the UAW union were preparing to go on strike at that facility this week.
How This Affects Other Auto Stocks
With Ford no longer combating UAW members, both Stellantis (NYSE:STLA) and General Motors (NYSE:GM) are expected to sign deals next.
Sam Fiorani, Vice President of Global Vehicle Dorecasting at AutoForecast Solutions, said the following to Reuters:
“This lays the groundwork for the next two contracts and they should fall in line fairly quickly because all three were within a narrow gap of each other.”
F stock is up slightly, STLA stock is down 1.3% and GM stock is up slightly as of Thursday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
