Week of September 18, 2023
The partnership between the UAW, the Big-Three automakers, and the US government began in 1980 with the bailout of Chrysler and was strengthened in 2008 during GM’s bankruptcy. For a host of reasons too numerous to go into detail here, the strike against the Big-Three should be settled in short order because the Biden Administration wants it settled in short order and that player has the strongest hand. Competitive economics are subordinated in government sponsored enterprises (think Amtrak), so additional cost burdens on the Big-Three will be addressed by continued government handouts in some shape or form. Hence, the production slowdown will prove an economic blip in the short term. Our Signals remain unchanged.
Bob Bilkie, CFA