About that auto strike About that auto strike http://www.federatedinvestors.com/mmdt/static/images/mmdt/mmdt-logo-amp.png http://www.federatedinvestors.com/mmdt/daf\images\insights\article\sign-on-strike-small.jpg September 20 2023 September 20 2023

About that auto strike

At the end of the day, it'll be a gift for competitors.

Published September 20 2023

Someone needs to let the UAW president know he is not striking against “the U.S. auto industry” as he keeps saying. He’s striking against the domestic remnant of the U.S. auto industry, which used to be “the Big 3” and is now “the Middle 3” and could be on its way to becoming “the Little 3.” GM/Ford/Stellantis now control just over 40% of U.S. auto production, not the 90%+ they had back in the glory days of the union. Their current wage/benefits structure is already 30% higher than Tesla, 10% higher than foreign auto companies’ non-union U.S. plants and presumably even a lot more higher than BYD, China’s largest auto producer that just entered the European market. However this goes, given where it’s started, it doesn’t look good for the legacy U.S. auto companies. Overlaying President Biden’s EV policies, Tesla and foreign auto companies such as Honda look like the winners. By the way, GM’s stock is flat YTD, Tesla is up 115% and Honda is up 78%.

Big Three U.S. market share

Company 1966 2023
GM 49% 17%
Ford 27% 14%
Stellantis (nee Chrysler) 14% 12%
Source: WardsAuto
Tags Markets/Economy . Equity .

Views are as of the date above and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector.

Federated Global Investment Management Corp.