GM, Ford shares up on talk of UAW concessions
Shares of General Motors Corp. and Ford Motor Co. rose this morning
after analysts raised their outlook based on growing expectations for
concessions in summer negotiations with the UAW.
JPMorgan Chase & Co. said the potential for the UAW to accept radical
change and grant "better-than-expected" concessions in the upcoming
summer contract negotiations could lead to a potential "near-doubling
in GM" share prices to nearly $50.
GM shares were trading at $37.69 late this morning, up 93 cents, or
2.6%, from Monday's close.
Ford shares were trading at $9.20, up 13 cents, or 1.4%, while
DaimlerChrysler shares were flat and Toyota's U.S. shares were down.
Analysts from JPMorgan and Goldman Sachs said a UAW agreement with
supplier Dana Corp. last week could signal a willingness by the union
to convert retiree health-care liabilities into funds run by the
Dana announced last Friday a proposed agreement with its major unions
-- the UAW and United Steelworkers union -- that included transferring
its retiree health care liabilities to the unions in return for
funding those liabilities at 71 cents on the dollar.
Top executives at the Detroit automakers have said they are interested
in examining the possibility of a similar health-care arrangement.
Analyst Robert Barry from Goldman Sachs said he expects a "modest,
positive read across for GM to the extent the Dana ... deal evidences
cutting retiree health benefits is on the table at the UAW."