Third Bridge analysts conducted interviews with several auto executives regarding the potential for a strike by the United Autoworkers Union (UAW). Their findings shed light on the situation within the automotive industry and its potential repercussions.
One key observation made by the analysts is the vulnerability of Ford Motor (NYSE:F) to severe financial consequences in the event of a UAW strike. This vulnerability is primarily attributed to Ford's heavy concentration in key production facilities and its significant dependence on high-margin models, most notably the F-series.
“Amid escalating labor tensions, it is likely that of the Detroit Big Three automakers, Ford stands to face the most severe financial impact in the event of a UAW strike,” the analysts said.
They went on to warn that the concerns raised by industry experts should not be taken lightly. The experts warned that a protracted UAW strike could initiate extensive disruptions within the automotive supply chain, resulting in a potential for a long-term decline in market share.
“Our experts caution that a prolonged strike could trigger far-reaching disruptions in the supply chain and lead to a long-term erosion of market share, in line with historical trends,” the analysts warned.
"A closer examination of average days of supply for critical models, coupled with the size of the UAW's allocated strike fund, has raised several red flags for industry observers,” they added.
Shares of F are up 2.37% in early trading Tuesday.