Ford Lays Off 600 Workers at Plant Targeted by UAW Strike

Ford Motor announced Friday it was laying off about 600 workers at its Michigan assembly plant.

The United Auto Workers is striking at the plant, but UAW President Shawn Fain instructed only workers in the paint shop and final assembly to strike.

Ford and the UAW didn’t immediately respond to requests for comment. But it doesn’t make much sense for Ford to keep the plant, which manufactures Ford Rangers and Broncos, running if cars can’t be painted or completed.

The contracts between the UAW and Ford (ticker: F), General Motors (GM), and Chrysler parent Stellantis (STLA) expired late Thursday without a new agreement.

The UAW launched a partial strike at three sites: Ford’s assembly plant in Wayne, Mich.; a GM facility in Wentzville, Mo.; and a Stellantis assembly complex in Toledo, Ohio. The union’s decision to target certain facilities for strikes is a new strategy, along with targeting at once all three auto makers with roots in Detroit.

Baird analyst Luke Junk wrote in a Thursday report the initial scope of the strike was more limited than expected. He thought the UAW would likely target engine and transmission plants that could have effectively shut down all North American operations.

“The situation could worsen from here,” added Junk.

The 2023 labor action follows a strike in 2019 against GM that lasted about 40 days. That stoppage cost GM about $3.6 billion in operating profit. The company reported adjusted operating profit of about $8.4 billion for the full year, so excluding the strike, operating profit might have totaled $12 billion.

GM earned about $9.7 billion in 2020 operating profit. That was also the year Covid shut down parts of the global economy for extended periods. How much of the $3.6 billion strike impact was recovered in 2020 and later years is hard to say.

GM has stayed profitable since 2019, reporting 2021 and 2022 operating profits of $14.3 billion and $14.5 billion, respectively. Management expects to make about $13 billion in operating profit in 2023, before any strike impacts.

GM’s experience is just a guide for investors looking to follow the 2023 UAW labor stoppage.