Approximately 4,300 Canadian autoworkers have been on strike against General Motors (NYSE:GM) since September 15, 2023, affecting three Ontario facilities. The strike is ongoing as of Tuesday, and includes the global engine and transmission supplier St. Catharines plant and a parts distribution center in Woodstock. The workers are represented by Unifor, a union that speaks for 315,000 workers across various industries.
The deadlock in negotiations for a new three-year labor contract started in July 2023. Unifor, led by national president Lana Payne, has been using pattern bargaining to encourage General Motors to accept terms similar to those agreed with Ford Motor (NYSE:F). These terms encompass significant wage increases over three years.
General Motors Canada maintains that it has proposed a record offer and is keen to reach an agreement promptly. Notably, the strike does not involve workers at General Motors' CAMI Assembly Plant in Ingersoll due to a separate contract.
In parallel with the Canadian strike, U.S strikes involving about 25,000 of the 150,000 United Automobile Workers (UAW) union members are taking place at several General Motors, Ford, and Stellantis (NYSE:STLA) plants. The UAW is also seeking substantial wage increases.
According to InvestingPro, General Motors is a prominent player in the Automobiles industry with a market cap of 43.4B USD. The company has been showing strong performance with a revenue growth of 28.48% LTM2023.Q2. It's worth noting that GM's management has been aggressively buying back shares, indicating their confidence in the company's future. Furthermore, the strong earnings should allow management to continue dividend payments.
InvestingPro also reveals that GM is trading at a low P/E ratio relative to near-term earnings growth, and its valuation implies a strong free cash flow yield. This might be an attractive point for investors looking for good value for their investment.
Despite the ongoing strikes and labor negotiations, analysts predict the company will remain profitable this year. In fact, it has been profitable over the last twelve months. This information, along with other insightful data and tips, can be found on InvestingPro, which offers additional tips for various companies including GM.
While the company is trading near its 52-week low, and the price has fallen significantly over the last three months, it's important to note that the company's fair value according to InvestingPro is 38.22 USD, higher than its previous close price of 30.99 USD. This suggests that the company might be undervalued, presenting a potential opportunity for investors.
As of the time of writing, GM's next earnings date is slated for October 24, 2023. Investors and stakeholders will be keenly watching the developments, especially in light of the ongoing labor disputes.
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