Ford gains as UAW announces progress in negotiations ahead of strike expansion deadline

Shares of Ford Motor (NYSE:F) surged by 4.4% in early trading following reports that the United Auto Workers (UAW) will announce substantial progress in its discussions with the automaker as we approach a Friday deadline for securing fresh labor agreements before the union potentially escalates its strike with the Detroit Three automakers.

Shares of General Motors (NYSE:GM) were up 0.4%, giving back earlier gains following the news, while shares of Stellantis (NYSE:STLA) gained 0.5%.

Earlier this week, UAW President Shawn Fain stated that the possibility of additional strikes could be avoided if companies demonstrated " significant progress" in reaching an agreement. Whether Ford will indeed prevent broader walkouts remains uncertain at this time.

An unnamed source also revealed to Reuters that the union will invite President Joe Biden to come to the picket lines.

According to the source, it is anticipated that the strike will encompass at least six more GM and Stellantis facilities located in Michigan.

GM, Ford and Stellantis have said they are making contingency plans for further work stoppages.

Approximately 12,700 employees at factories in Missouri, Michigan, and Ohio, where the Ford Bronco, Jeep Wrangler, Chevrolet Colorado, and other popular models are produced, participated in the walkout.

Extended strikes at plants manufacturing large pickup trucks have the potential to result in significant financial losses for the automakers, potentially costing them billions in revenue and profits. Analysts estimate that the automakers make as much as $15,000 in profit per vehicle for their respective large pickup models.

Ford managed to secure a last-minute agreement to prevent a potential strike at its Canadian operations late on Tuesday. Unifor, the union representing approximately 5,600 Canadian auto workers, had previously issued a strike threat that encompassed all three Ford plants in the country.