Current:Home > ContactGM earned more than $3 billion in profit, even after hit from UAW strike -Edge Finance Strategies
GM earned more than $3 billion in profit, even after hit from UAW strike
View
Date:2025-04-14 18:36:58
GM on Tuesday posted a quarterly profit of more than $3 billion, down 7% from a year earlier due to lost production from the United Auto Workers strike as well as increased warranty costs.
Thousands of UAW members have been on strike since Sept. 15 — nearly six weeks — against GM and its Detroit competitors, Ford and Jeep maker Stellantis.
So far the union has spared factories that make GM's most profitable vehicles, pickup trucks and large SUVs, from its targeted strikes. Yet the UAW demonstrated again this week that risks to those money making facilities can rise the longer the strike goes on.
The work stoppages will likely reduce GM's pretax earnings by $800 million this year, the company's chief financial officer Paul Jacobson warned Tuesday during an earnings conference call. The strike would cause another $200 million every week in 2024, he added.
Jacobson said the third-quarter strike loss was $200 million, since the walkouts were only in effect the final two weeks of the period. He predicted another $600 million of losses from October through December.
Revenue during the most recent quarter, which ran from July through September, rose 5.4% to $44.1 billion.
"We remain optimistic and hopeful that we'll make progress and get this resolved going forward," Jacobson said.
He said many have expressed concerns about the company taking on higher labor costs, but GM has planned for it by cutting in other areas. For example, GM's annual fixed costs will be $2 billion lower than 2022 by the end of 2024, Jacobson said. The company also is slowing electric vehicle production to adjust to slower short-term growth in demand.
Jessica Caldwell, head of insights at Edmunds, said GM's sales numbers looked good on the surface, but that could change in the next few months. As cold weather arrives, those in the market are usually looking for larger four-wheel-drive vehicles. But she said a lingering strike could close plants, cut production of those lucrative vehicles and "be harbingers of sales declines during an important stretch of the calendar ahead."
UAW leaders and Detroit's Big Three have spent weeks trying to produce a new, four-year labor contract. The union's demands include a hefty pay increase, annual cost-of-living adjustments, pension benefits for all employees, greater job security, restrictions on the use of temporary workers and a four-day work week. Along with a wage hike, the union also wants the automakers to eliminate a two-tiered wage system the companies adopted in 2007 as the companies were struggling financially.
Roughly 6,800 UAW members walked out of Stellantis' largest plant in the Detroit suburb of Sterling Heights on Monday. Two weeks ago, 8,700 workers walked off their jobs at Ford's largest and most profitable plant, one that makes pickups and big SUVs in Louisville, Kentucky. As of Tuesday, 28% of the union's 146,000 members at the Detroit Three are on strike.
For their part, the automakers say they have made reasonable counteroffers, while arguing that the UAW's wage and other demands would make it hard to compete with other car manufacturers. Both sides have said they're open to further negotiations.
GM's most recent offer to the union features a 23% wage increase, matching employee contributions to a retirement plan up to 8% and reinstated cost-of-living adjustments, among other things.
"The current offer is the most significant that GM has ever proposed to the UAW, and the majority of our workforce will make $40.39 per hour, or roughly $84,000 a year by the end of this agreement's term," GM CEO Mary Barra said Tuesday in a letter to shareholders. "It's an offer that rewards our team members but does not put our company and their jobs at risk."
- In:
- General Motors
- United Auto Workers
veryGood! (1)
Related
- Who are the most valuable sports franchises? Forbes releases new list of top 50 teams
- Fani Willis hired Trump 2020 election case prosecutor — with whom she's accused of having affair — after 2 others said no
- 'Origin' is a story of ideas, made deeply personal
- The political power of white Evangelicals; plus, Biden and the Black church
- Average rate on 30
- Midwife who gave 1,500 kids homeopathic pellets instead of vaccines put lives in jeopardy, New York health officials say
- Trump urges Supreme Court to reject efforts to keep him off ballot, warning of chaos in new filing
- Maine has a workforce shortage problem that it hopes to resolve with recently arrived immigrants
- 'Kraven the Hunter' spoilers! Let's dig into that twisty ending, supervillain reveal
- Rhode Island govenor wants to send infrastructure spending proposals to voters in November
Ranking
- Meet the volunteers risking their lives to deliver Christmas gifts to children in Haiti
- Rifts emerge among top Israeli officials over how to handle the war against Hamas in Gaza
- Ashley Park Shares She Was Hospitalized After Suffering From Critical Septic Shock
- An Israeli preemptive strike against Hezbollah was averted early in the Gaza war, top official says
- Which apps offer encrypted messaging? How to switch and what to know after feds’ warning
- These Are the Best No Show Underwear To Wear Beneath Leggings
- Man sentenced to life plus 30 years in 2018 California spa bombing that killed his ex-girlfriend
- Apple offers rivals access to tap-and-go payment tech to resolve EU antitrust case
Recommendation
A South Texas lawmaker’s 15
More than 580,000 beds sold at Walmart, Wayfair and Overstock recalled because they can break or collapse
Global buzzwords for 2024: Gender apartheid. Climate mobility. Mega-election year
These Are the Best Sales Happening This Weekend: Abercrombie, Le Creuset, Pottery Barn & More
Gen. Mark Milley's security detail and security clearance revoked, Pentagon says
Your call is very important to us. Is it, really?
This mother-in-law’s outrageous request went viral. Why 'grandmas' are rejecting that title.
More than 1,000 rally in Russian region in continuing protests over activist’s jailing