Justin Sullivan/Getty Images News
Ford Motor Company (NYSE:F) fell in early trading on Thursday after the United Auto Workers Union expanded its strike against the automaker to a key truck plant in Kentucky.
Weighing in on the surprise move, Bank of America estimated that the work stoppage at the Kentucky Truck plant will have a weekly $247M EBIT impact for Ford (F), which works out to about a $0.05 EPS hit.
Analyst John Murphy said the new strike action brings the total weekly run-rate impact for Ford Motor (F) from the UAW strike to $430M in EBIT, or $0.08 on an EPS basis.
To put the numbers in context, Murphy noted that the Ford 2023 EBIT estimate amounts to $10.7B with EPS at $1.96.
Murphy said it is unclear what specifically triggered the strike, although prior commentary suggested the two parties were still resolving differences regarding UAW representation at electric vehicle battery plants and pension benefits, among other items.
Overall, BofA sees the latest strike move from the UAW as concerning given that Ford (F) gave the largest concessions to the union among the Detroit Three.
“It is possible, however, that since Ford has been the most accommodating, the UAW might believe it can obtain additional concessions by increasing the pressure. Recall also that this UAW action comes right after the threat of a strike at GM’s Arlington plant (somewhat comparable in terms of importance) and the Unifor strike of GM in Canada, which have both resulted in immediate concessions.”
However, BofA warned that further allowances from Ford (F), General Motors (GM), and Stellantis (STLA) could be financially unsustainable in the longer term.
