General Motors said its profit fell 7.3% in the third quarter as the workers strike that began on Sept. 15 started affecting costs and revenue.
Net income fell to $3.06 billion from $3.31 billion a year earlier, the company said in a statement Tuesday.
The United Auto Workers strike is costing the company $200 million a week, Chief Financial Officer Paul Jacobson said in a briefing with reporters, according to Reuters. The company also pulled its guidance for profit in 2023.
GM had previously estimated that net income attributable to stockholders in 2023 would be in the range of $9.3 billion-$10.7 billion, an increase from the previous outlook of $8.4 billion-$9.9 billion.
GETTY IMAGES NORTH AMERICA / BILL PUGLIANO
In a letter to shareholders, Chief Executive Officer Mary Barra addressed the workers strike, saying that GM has offered “for weeks” a record contract to the UAW.
“It’s an offer that rewards our team members but does not put our company and their jobs at risk,” Barra wrote in the letter. “Accepting unsustainably high costs would put our future and GM team member jobs at risk, and jeopardizing our future is something I will not do.”
About 40,000 workers have joined the walkout, UAW said in a statement Monday. It started six weeks ago in three assembly plants of GM, Ford and Stellantis. The strike now includes seven plants and 38 parts distribution centers in 22 states, according to UAW.
The union is demanding that the automakers share more of their profits with workers.
“Ford, GM and Stellantis made a quarter-trillion dollars in North American profits over the last decade,” UAW said. “They made a combined $21 billion in total profits in just the first six months of this year. And yet all of them are still refusing to settle contracts that give workers a fair share of the record profits they’ve earned.”
Electric Vehicles
Barra also said that the company plans to launch this year and in 2024 new SUVs that are more profitable.
“We are also moderating the acceleration of EV production in North America to protect our pricing, adjust to slower near-term growth in demand, and implement engineering efficiency and other improvements that will make our vehicles less expensive to produce, and more profitable.”
Barra, who has been GM’s CEO since 2014, said the company has “work to do” to meet EV targets in 2025 because of higher labor costs and the outlook for pricing and demand.
Ford is scheduled to release its third-quarter earnings Thursday and may also comment on the impact of the UAW strike.
