Skip to content

GM Profit Falls on UAW Strike

Bill Koenig
By Bill Koenig Senior Editor, SME Media

General Motors Co. posted a lower third-quarter profit because of the 40-day United Auto Workers union strike against the company.

GM’s quarterly profit totaled $2.3 billion, or $1.60 a share, down from $2.5 billion, or $1.75, for the same period in 2018.

Detroit-based GM’s adjusted profit fell 5.9 percent compared with a year earlier to $3 billion. Company revenue declined 0.9 percent to $35.5 billion.  

Members of the Detroit-based UAW walked off the job in mid-September while negotiating a new four-year labor agreement. The automaker and UAW reached an accord earlier this month and union members completed ratification last week.

Under terms of the ratified contract, union members will receive an $11,000 signing bonus, two annual 3 percent raises and two 4 percent lump-sum payments.

GM estimated the strike reduced its pretax North American profit $1 billion during the second half of September. The company said the strike will have a full-year hit of $2 a share, or about $3 billion.

Despite the strike, North America was GM’s main source of pretax profit with $3 billion. That was an improvement from $2.8 billion a year earlier. The automaker said large pickups, its most profitable line of vehicles, recorded improved sales during the quarter.

The company also said it expects lower spending for capital expenditures. That, combined with the strike, spurred GM to revise its financial forecast for the year.

GM said it now expects profit of $4.28 to $4.69 a share. The company also cut its adjusted profit forecast, the figure watched by investors, to $4.50 to $4.80 a share. That’s down from a previous forecast of $6.50 to $7 a share, according to Reuters.

 

Related Articles

  • UAW Logo
    Manufacturing Management

    UAW Negotiations Failed to Make Major Changes, Panel Says

    January 15, 2020
    The 2019 negotiations between the United Auto Workers and Detroit-area automakers didn’t make major changes in the labor situation at the companies, a panel of labor analysts and former executives said today.
    By Bill Koenig - Senior Editor, SME Media
  • Carlos Ghosn
    Manufacturing Management

    Carlos Ghosn Fights Back

    January 8, 2020
    Carlos Ghosn, the former executive who fled Japan last month, went on the offensive today against the Japanese criminal justice system and Nissan Motor Co., the automaker he formerly headed.
    By Bill Koenig - Senior Editor, SME Media
  • Electronic Vehicles
    Manufacturing Management

    Consumers Have Mixed Feelings About EVs, Deloitte Says

    January 7, 2020
    Consumers participating in a global survey have mixed feelings about electric vehicles, viewing such vehicles as environmentally friendly while still having concern about battery range.
    By Bill Koenig - Senior Editor, SME Media
  • Latest Videos

  • Connect With SME Media

Webinars, White Papers and More!

SME's Manufacturing Resource Center keeps you updated on all of the latest industry trends and information. Access unlimited FREE webinars, white papers, eBooks, case studies and reports now!