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GM's net profit fell as a result of the strike.

2024-03-04 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)10/25 Report--

On October 24th GM released its third-quarter 2023 results. GM's net income was $44.1 billion in the third quarter, up 5 per cent from a year earlier, while net profit was $3.1 billion, down more than 7 per cent from a year earlier, according to the results.

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While gm's revenue grew in the third quarter, its net profit fell more than 7% from a year earlier, according to the earnings data. GM said the decline was partly due to a strike by the United Auto Workers (UAW).

The United Auto Workers (UAW) strike broke out on September 15th and continues. It should be noted that GM derives almost all of its profits from North America, with American factories being the main source, and it has been hit hard by the UAW strike for nearly a month. According to reports, hours after GM's results were announced, UAW announced that it would extend the strike to the US plant in Arlington, Texas, which is GM's largest plant in the United States and the most profitable SUV plant, mainly producing large SUV such as Cadillac Escalade and Chevron Tahoe. GM will also face greater losses as the strike spreads to the plant. Earlier, GM had announced job cuts due to the impact of the strike on some facilities, while the shutdown led to a loss of about $200m in profit in September and about $600m in the fourth quarter.

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In terms of sales, data show that GM sold 981000 vehicles worldwide in the third quarter of this year, up 15000 from the same period last year, including 674300 in the United States, up 21 percent from the same period last year, and 623000 in China. It is worth mentioning that GM reiterated in its financial report that it plans to produce 1 million electric vehicles in the United States and China each by 2025, but it will be difficult for GM to achieve this plan.

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Data show that GM's electric vehicle sales in the United States rose 28% in the third quarter of this year compared with the previous quarter, but GM had already announced that it would postpone plans to upgrade its local electric vehicle plant in the United States. GM says slowing production of electric cars is to protect pricing, making GM cheaper and more profitable. Apart from the US market, GM is also having a hard time in the Chinese market. At present, electric models for brands such as Cadillac and Chevrolet are still very limited. GM's market share in China is gradually being divided by independent brands, including Tesla and BYD.

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In addition, it is reported that the total economic losses caused by the strike have exceeded 7 billion US dollars. Some analysts said that if the strike does not end as soon as possible, the impact on the global auto industry chain will be even greater, suppliers may be under pressure from falling sales in the fourth quarter, and this pressure will lead to further layoffs. Bill Ford, executive chairman of Ford Motor, also said bluntly: if the strike is further expanded, it will threaten the entire U. S. auto industry. It is unclear what the impact will be on GM as the UAW strike against GM continues, but GM has withdrawn its previous forecast for full-year net profit of between $9.3 billion and $10.3 billion.

As a result of the strike, GM expects to lose an extra $200 million for every week of strike. GM CEO Mary Bora pointed out that as the UAW strike affected revenue and profits, the company would slow its electric vehicle strategy and put its profit target ahead of its sales target. It said at the earnings meeting that the company was optimistic that an agreement would be reached with the unions soon. According to the latest report, GM has proposed to the union a 23% pay rise within four and a half years and a big increase in other benefits. According to this calculation, the annual income of employees who work 40 hours a week will reach $84000 (about 614000 yuan).

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