GM says UAW strike cost it $1.1 billion

November 29, 2023

General Motors (GM) said Wednesday that it took a $1.1 billion hit to its pretax earnings due to the six-week labor strike by the United Auto Workers (UAW).

The auto giant added that it expects to absorb the costs of the new union contract, has reinstated its full-year earnings forecast and is even raising its shareholder dividend by 33%. 

The 45-day UAW strike began at midnight on September 15 and ended October 30 with tentative deals with GM and the other “Big Three” automakers, Stellantis and Ford.

UAW workers ratified the GM deal on November 16.

All three automakers’ contracts were negotiated separately. The GM deal included 25% base wage increases through April 2028 and a cumulative raise in the top wage by 33%, compounded with estimated cost-of-living adjustments to more than $42 an hour.

GM on Wednesday said it predicts full-year net income of $9.1 billion to $9.7 billion. That’s down a bit from earlier forecasts of $9.3 billion to $10.7 billion.

However, the automaker expects to generate more cash for the full year—somewhere between $10.5 billion and $11.5 billion, up from an earlier forecast of $7-$9 billion. 

To reach its goals, GM expects to cut capital spending, including a slowdown in spending on electric vehicles. It also expects to cut back on spending at Cruise, its autonomous vehicle unit—whose robotaxi license was revoked last moth by regulators in California after one of the vehicles dragged a pedestrian 20 feet after that person was hit by a different car.

Shares of GM rose 8.6% ahead of Wednesday’s opening bell on Wall Street, but remain down about 27% in the past year. 

PHOTO: UAW members on strike from GM plants in Lansing Michigan, October 25

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