Bill Pugliano
The United Auto Workers strike has not shown any meaningful signs of being resolved shortly, with both sides digging in around their key points. While Joe Biden became the first sitting U.S. President to walk a picket line with union workers, representatives from General Motors (NYSE:GM), Ford (NYSE:F), and Stellantis (STLA) continued to call the totality of the UAW demands unreasonable.
Wedbush Securities' Dan Ives and other analysts have called the decision for the Detroit automakers nearly impossible due to the massive planned electric vehicle transformation for all three. Tesla (TSLA) CEO Elon Musk also weighed in on the United Auto Workers strike, saying the union's demands if met fully would bankrupt Detroit's big three automakers.
So far, the limited scope of the UAW union member walkouts has not impacted auto supply or pricing in the U.S. However, Cox Automotive has warned that only about half of U.S. households can afford a $400 per month auto payment, which makes the prospect of higher prices down the road due to labor wage increases a potential headwind for demand from the Detroit players. Some analysts think Japanese brands may be in the best position to benefit from an extended UAW strike. Toyota (NYSE:TM) has resolved many of its supply problems and it is now increasing vehicle production, while the affordable lineup from Mazda Motor Corporation (OTCPK:MZDAY), Nissan Motor (OTCPK:NSANY), and Honda Motor (HMC) may start to look more appealing to U.S. car buyers.
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