GM’s quarterly profit falls as the UAW strike expands to one of its biggest factories
Good earnings, bad news… General Motors reported a stronger-than-expected quarter yesterday with sales up 5% from a year ago. But it wasn’t all on cruise control: profit dropped 7% to $3.1B as the United Auto Workers strike dragged on. Keep in mind: the strike started on September 15, and GM’s report was for the quarter that ended on September 30, so the strike’s effects could be felt even more this quarter.
GM pulled its annual guidance, saying it’s now losing a whopping $200M/week in profit because of the UAW’s targeted work stoppages.
GM also ditched its goal of building 400K EVs by next summer, as automakers start to second-guess the electric market.
Feelin’ the Fain… Hours after GM reported earnings, UAW President Shawn Fain ordered a walkout at GM’s Arlington, Texas, factory — one of the company’s largest and most profitable assembly plants. 5K workers walked out of the Arlington hub, which makes highly lucrative SUVs like Escalades and Chevy Suburbans. Fain cited GM’s strong earnings when announcing the escalation. GM called the Arlington strike “unnecessary and irresponsible,” saying it had recently sweetened its proposal to the union.
The offer, which GM called a “record” contract, includes a 23% wage boost over 4 years (Ford and Stellantis made similar proposals). Fain said it’s not enough.
More pain, more gain… The more the UAW expands its strikes, the more the union hopes to gain (like a 40% pay bump). The strike has already cost the US economy $9B+. Fain turned down record contracts, saying “there is more to be won.” Some academics say Fain’s gone too far. Fain himself has called his demands “audacious,” but he’s doubling down: on Monday, the UAW expanded its strike to a Stellantis plant that makes Ram pickups.