Now, as the strike extends into its second week, some investors say they’re willing to forgo those coveted share buybacks as the companies face soaring labor costs over the next several years. The UAW is asking General Motors Co., Stellantis NV and Ford Motor Co. for significant pay raises and other concessions in their next four-year contract.
Labor organizations say companies use buybacks to manipulate stock prices and to reward already wealthy investors, including executives who own shares. Mike Booth, vice president of the UAW, wrote in an op-ed last week that buybacks are “lavishing Wall Street with the results of our labor.” Ford bought back $3.5 billion in shares from 2012 to 2022, according to data compiled by Bloomberg, though the company — especially the founding Ford family that controls its super-voting shares — prefers to issue dividends. Ford declined to comment.
Reducing dividends to conserve cash could trigger a big slide in the share prices, investors said. Discontinuing payouts altogether would force the stocks out of dividend index funds, pressuring them further.