General Motors announced Tuesday that it had a profit of $3.1 billion from July through September. This was down more than 7% from the same period last year, due in part to a six-week strike by the United Auto Workers union, which halted operations for two days. The company’s vehicle factory and 18 spare parts warehouses.
GM said the strike reduced its preinterest and tax earnings by about $200 million in the final weeks of the third quarter, and about $600 million since the fourth quarter began Oct. 1. The automaker also estimated that the strike could result in losses of $200 million. A week from now.
In a conference call with reporters, GM Chief Financial Officer Paul Jacobson said, “We remain optimistic that we can reach an agreement as soon as possible,” but does the company believe a deal is close? He declined to make a clear statement. Regarding new contract with UAW
On Friday, GM presented the union with a contract offer that included a 23% wage increase over four years. This would raise the UAW’s standard wage from $32 an hour to more than $40 an hour. At that rate, an employee working 40 hours a week would earn about $84,000 a year, not including overtime or profit-sharing bonuses, which have exceeded $10,000 in the past two years.
“They’re demanding a record contract, and that’s exactly what we’ve been offering for weeks: record wage increases,” GM CEO Mary T. Barra said in a statement. “This is a historic deal with record job security, world-class health care.” . “This is an offer that rewards team members, but does not put the company or their jobs at risk.”
A union strike targeting specific sites owned by three major U.S. automakers has shut down GM’s pickup truck plant in Missouri and another plant in Michigan that produces large sport-utility vehicles. .
In the third quarter, GM made almost all of its profits in North America, driven primarily by U.S. factories staffed by UAW members. The bottom line was hit by a 42% drop in profits from a joint venture in China, a slight decline in profits in its financial division, and a loss at its cruise division, which develops self-driving cars.
Despite the strike, GM reported third-quarter sales rose about 5% to $44.1 billion. Worldwide sales for the quarter were 981,000 units, an increase of approximately 15,000 units from the same period last year. In the United States, the average price of the company’s vehicles was $50,750, down slightly from the previous quarter.
GM said it was withdrawing its previous forecast for full-year net income in the range of $9.3 billion to $10.3 billion, citing UAW strike costs, increased warranty costs and an uncertain economic outlook.
The company’s quarterly results exceeded analysts’ expectations.
Jacobson said GM wants to introduce redesigned SUV models that are more profitable than traditional SUV models and could save money by delaying plans to introduce electric vehicles. GM recently announced that it would postpone the start of production of electric pickups at its plant in Orion, Michigan, from 2024 to the end of 2025, as EV sales growth has slowed more than expected.
Jacobson said GM currently plans to slowly ramp up electric vehicle production in 2025, but still aims to be able to produce 1 million electric vehicles a year in North America by the end of 2025. It is said that they are aiming for
“Our commitment to an all-EV future is as strong as ever,” he said.