Ford Faces Crippling Strike

By Douglas A. McIntyre Published Sep 11, 7:30AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Ford Faces Crippling Strike — © Bill Pugliano / Getty Images

Ford faces a strike by the United Auto Workers (UAW) that could cripple it financially and set it back in its critical race to become an important player in the electric vehicle (EV) market. Rival Tesla does not face either of these. It does not have union workers, and its EV production continues to grow. This year, it will launch its Cybertruck, competing with Ford’s EV flagship, the F-150 Lightning. Today, Ford leads that race, but a strike could erase that. Ford’s ambitions for EVs are already behind schedule. (These are America’s least reliable new cars.)
[in-text-ad]
Below is what the press has to say about Ford’s problems and those of other members of The Big Three: General Motors and Stellantis.

The Wall Street Journal reports that, just as a strike may start, Ford has profit problems because EVs have little or no margins. At the same time, the UAW has targeted the high earnings Ford enjoyed for its legacy fossil fuel models. “In the short run, a factory walkout would threaten to disrupt Detroit’s rollout of several new EV models and potentially drain billions of dollars in profits.”
[nativounit]
The Detroit News reports that the UAW may target all three companies to cripple the entire industry and quickly bring Ford and the others to the negotiating table. And the ripple effect would pull down other parts of the economy. “A strike against all three major automakers — General Motors Co., Stellantis NV and Ford Motor Co. — could cause damage not only to the industry as a whole but also to the Midwest and even national economy, depending on how long it lasted.”
[wallst_email_signup]
Ford’s margins would be quickly damaged because it depends on the F-150 for 38% of its unit sales in the United States. According to NBC, “The Ford F-Series is one of the Detroit automaker’s most profitable automobiles and has been the best-selling vehicle in the U.S. for more than 40 years.”
[recirclink id=1307276]
Tesla could be the largest beneficiary of any strike. AutoBlog reports: “But production slowdowns from a work stoppage combined with potentially large labor cost increases could put the brakes on Detroit’s race to beat Tesla at the EV game.”

Ford’s future, which was bright recently, and particularly promising as it moved to the EV sector, could be damaged for months.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.