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The ongoing UAW strike is once again set to expand on Friday if no breakthroughs are made at the negotiating table. With 18,300 workers on strike at 41 US auto plants owned by Ford, GM, and Stellantis, the union has significant capacity and resources to extend work stoppages even further. At the strike’s current scale, the production of tens of thousands of vehicles has been lost to the tune of billions of dollars in costs per week.

Automakers are willing to absorb losses today in the hope that negotiations yield lower labor costs in the future. Expenditures on labor are a significant concern among the Big Three US vehicle manufacturers, as they need to compete with non-union EV producers like Tesla for future sales volumes. Not only do Tesla’s US EV sales dwarf those of traditional automakers, its manufacturing costs are significantly lower as well. The electric transition facing the Big Three may become even more costly than it was already expected to be if the UAW is able to include battery plants in new contracts.

Related Stocks: Ford Motor Company (F), General Motors Company (GM), Stellantis N.V. (STLA)

Last week, MRP noted that an expansion of the UAW’s picket line was imminent, with threats to add even more strikers by Friday. The United Auto Workers (UAW) union strike began on September 15 with 12,700 of Detroit’s Big Three automakers’ 146,000 workers taking to the picket line. The first stage of the strike impacted just three facilities. However, upon expansion to 18,300 employees, 41 facilities have now been targeted by the UAW.

The threat of further expansion is on the table once again this week. A decision is expected tomorrow from UAW President Shawn Fain. Only one Ford plant has been affected by the strike, owing to some progress that has been made in negotiations with the union, while the other 40 are GM or Stellantis facilities. Deutsche Bank estimated that GM, Ford, and Stellantis lost production of more than 16,000 vehicles in just the first week of the strike. The big three are countering work stoppages by laying off and furloughing thousands of workers and draining inventories, but the UAW entered the dispute with $825 million in its strike fund to…

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