UAW Strikes Against Detroit's Big 3, Arm Holdings Day 2, No AI Jump for Adobe 9/15/23

SPEAKER_1 (0:00)

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Jim Cramer (0:26)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:33)

Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Sara Eisen at Post 9 of the New York Stock Exchange. Cramer has the morning off.

Futures relatively steady, even as the UAW initiates this unprecedented strike at select factories. Yields a bit higher as China data comes in hot for once.

Oil 91.15, that's another year to date high. Triple which today should drive some volume. A roadmap begins with a strike though. Thousands of UAW workers hit the picket lines. The first walkout to hit the big three all at once.

David Faber (1:03)

Plus arm shares are, well, it's still looking good ahead of the open, looking to extend those gains from yesterday. It was the biggest IPO of the year and quite a significant day.

Sara Eisen (1:13)

And rally pause, stock index futures little changed after the best day for equities of the month.

Carl Quintanilla (1:19)

Let's begin though with the UAW striking against Detroit's big three simultaneously for the first time in that union's history. Our Phil LeBeau is in Wayne, Michigan after talking to GM's Mary Barra and joins us with more.

Phil LeBeau (1:32)

Hey Carl, we are outside of the Michigan assembly plant. It is the Ford plant where they build the Ranger pickup truck as well as the Bronco SUV, a very popular model. Here's what this strike is doing in terms of its impact, not just at Ford, but also at GM and Stellantis. Total number of workers around approximately 12,700, just under 13,000 UAW members who are now on strike at the Ford plant here in Wayne, the Stellantis plant, that's the Jeep plant in Toledo, Ohio, and the GM plant just outside of St. Louis in Wentzville, Missouri.

All together, those plants represent about 15% of the Detroit 3's US production. Let me say that again, 15% of the Detroit 3's US production. Here are some of the strikers talking about the offers that have been made of a 20% pay hike and why that's not enough at this point.

Sara Eisen (2:26)

It's a start, but it's not where it should be.

SPEAKER_1 (2:29)

So, we just gotta keep fighting for what's right.

SPEAKER_8 (2:33)

We're ready to roll.

We're gonna hit it hard. We're just gonna go from there and say, if we gotta be out two, three weeks, four weeks, whatever it takes to get what we need to get.

Phil LeBeau (2:41)

Take a look at this. This is General Motors in the Wentzville facility. That builds their midsize pickups. We're talking about the GMC Canyon, as well as the Colorado pickup trucks and their full-size vans. It runs three shifts, five days a week. Earlier today, when we talked with Mary Barra, we asked her just how much of an impact is this strike going to have on General Motors and how frustrated is she right now? Here's what she had to say.

Mary Barra (3:10)

I'm extremely frustrated and disappointed. We don't need to be on strike right now. We put a historic offer on the table that not only has very significant gross wage increases in total through the contract, over 20% that compounded is 21%, but we also have job security. We maintain world-class healthcare. There's so many aspects of the offer we have on the table that I think really is going to resonate with our employees. So we didn't need to be here.

Phil LeBeau (3:39)

As you take a look at how shares of Ford, GM and Stellantis are indicating before the open today, keep in mind that there are no negotiations scheduled for today. There will be a UAW rally in downtown Detroit later this afternoon. Guys, I think that we are looking at a strike here that it's not going to be resolved anytime soon. Now, that doesn't mean that they couldn't come to an agreement soon, but I don't sense that we're going to see this resolved by Monday or Tuesday. It's a possibility. I just don't see it happening.

Why, Phil?

I think they're too far apart, and I think the UAW has leverage right now. Maybe being blunt with you, I think that's the way that Sean Fain looks at this. He believes that he can get much better than 20%, much better than the elimination or the reduction in the number of tiers, and tiers is where you hire a worker at this rate, eventually they make it to the top rate, but it takes a number of years to get there. They want that gone completely. I'm not sure if they're going to get it completely gone, but they are pushing in that direction. So, from their perspective, they believe that they have leverage right now.