Devoted to understanding the basics and fundamentals of investing

General Motors Corporation (NYSE:GM) and the UAW union reached a tentative agreement this morning that will end the nationwide strike that began just two days ago. Just as I pointed on Monday, this strike was more of last-minute negotiating ploy than anything else, and the expectations of a short strike certainly did come true. The contract is said to put the responsibility for retirees healthcare into the UAW's hands, and certain jobs were also guaranteed by GM. GM shares are jumping by 4.74% on the news, and are leading the Dow higher today.

I believe that all sides understood just how huge the stakes are right now. GM simply cannot afford to have a long strike hurting its revenue and market share. GM competitors such as Toyota Motor Corporation (NYSE:TM) and Honda Motor Company (NYSE:HMC) have been taking market share from the company, and would have certainly hurt GM badly if they had a prolonged strike.

Major auto suppliers are trading higher on the news of the agreement today. Visteon Corporation (NYSE:VC) is higher by 3.14%. Johnson Controls Inc. (NYSE:JCI) is higher by 1.33% so far today. American Axle & and Manufacturing Holdings (NYSE:AXL) is receiving the largest boost today since it is so highly levered to GM, gaining 6.66%.

I believe that this was a situation where everyone involved understood it simply wasn't helpful to them to have a prolonged strike. The UAW wouldn't have benefited from a long holdout, and the GM Corporation as a whole would have been hurt significantly.