Ford, Obama, UAW Win in Contract Deal; Investors Wait
Workers were approving the tentative agreement announced Oct. 4 by a 63% to 37% margin with 78% of the vote counted, the United Auto Workers said Tuesday morning in a post on Facebook. The vote was 16,691 in favor with 9,698 opposed.
In results announced last week, some plants outside Detroit were voting against the contract.
The deal is significant because Ford is the only one of the Detroit Three in which workers didn't give up the right to strike in bankruptcy deals overseen by the federal government, which lent billions to General Motors (GM) and Chrysler.
GM workers approved a contract last month. The focus now turns to Chrysler, where workers are voting on their four-year deal.
The smooth resolution of the three contracts would seem to benefit not only the U.S. auto industry, which could look forward to four more years of recovery under contracts that do not bring burdensome cost increases, but also President Obama, because it seems clear that Obama's big bet on rescuing the auto industry is paying off.
It is paying off for the auto companies, which are seeing steadily rising sales and consistent profit and now say they can hire, in total, about 20,000 new U.S. workers under the new contracts.
So far , investors in Ford and GM haven't been beneficiaries.
GM went public at $33 on Nov. 18, 2010, when shares opened at $35.An hour after the opening on Tuesday, shares traded at $22.94, down 24 cents on the day. Since its Nov. 18 opening, GM shares are down 34%.
It is safe to say the pricing of the shares reflected the strong performance at the time of Ford stock, which opened on Nov. 18 at $16.77.
An hour after the opening on Tuesday, Ford stock traded at $11.32, down 8 cents for the day. Since Nov. 18, the shares are down about 32%.
Either the two companies are poised for big gains -- this is what many auto industry analysts expect -- or the stock market knows something that is imperceptible to many of the rest of us.
-- Written by Ted Reed in Charlotte, N.C.
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