Shares of American carmakers General Motors (GM) and Ford experienced a significant decline due to increasing concerns over rising labor costs amidst demands for pay raises from the auto trade union. On the New York Stock Exchange, GM shares plummeted by 5.8%, marking the largest daily drop in eight months. Similarly, Ford shares also fell by 4.5%. The United Automobile Workers Union (UAW) is expected to initiate negotiations with the US’ Big 3, demanding wage increases and welfare benefits, a process that occurs once every four years. Industry estimates suggest that these demands could cost at least $80 billion or 105.2 trillion Korean won. This situation has created anxiety among investors, as any potential strike resulting from the negotiations could have detrimental effects on the automakers’ operations and earnings prospects. Analyzing the situation, William Seleschi, an analyst at Argus Research, an American investment research firm, stated, “Investors are concerned whenever negotiations are underway with the UAW because a potential strike could negatively affect automakers’ operations and earnings prospects.”
[인포스탁데일리=김영택 기자] Shares of US carmakers General Motors (GM) and Ford plunged.
This is because concerns have grown that labor costs could soar as the auto trade union demands pay rises.
On the 10th (local time), GM shares plunged 5.8% on the New York Stock Exchange, recording the biggest daily drop in eight months.
Ford shares also fell 4.5%.
According to Bloomberg, the United Automobile Workers Union (UAW) is expected to demand wage increases and welfare benefits ahead of the negotiations with the US’Big 3′, which take place once every four years.
Although the specific cost has not been calculated, it is estimated in the industry to reach at least 80 billion dollars, or 105.2 trillion won in Korean currency.
“Investors are concerned whenever negotiations are underway with the UAW because a potential strike could negatively affect automakers’ operations and earnings prospects,” said William Seleschi, an analyst at Argus Research, an American investment research firm.
Reporter Kim Young-taek site0103@infostock.co.kr
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