Despite the strike by the United Auto Workers, General Motor Co. in Detroit posted strong third-quarter results, according to a letter from Chair and CEO Mary Barra to shareholders.
Barra reports that the automaker had net income of $3.1 billion and $3.6 billion of Earnings Before Interest and Taxes-adjusted (EBIT) in the quarter.
Barra attributes the company’s success to making “great vehicles the foundation, and we have earned leadership in key segments like full-size pickups and full-size SUVs that have consistently strong pricing and margins.”
And GM is not letting up, she says. This year and next year, the company is planning to launch a wide range of new SUVs that are more profitable than the outgoing models.
“Our supply chain team and logistics partners in North America have done great work improving the flow of vehicles from our assembly plants to our dealers,” says Barra. “Our U.S. dealers helped us outperform the market with strong pricing and essentially flat incentives. We were profitable in every region, including China. And GM International excluding China is on track to deliver significantly higher EBIT-adjusted in 2023 compared to a year ago.”
After reporting the quarterly results, in her letter, Barra addressed the UAW work stoppage.
“Regarding the ongoing strikes at some of our U.S. facilities: I know many of you are concerned about the impact of higher labor costs on our business in the United States,” says Barra. “Let me address this head on. It’s been clear coming out of COVID that wages and benefits across the U.S. economy would need to increase because of inflation and other factors.
“The current offer is the most significant that GM has ever proposed to the UAW, and the majority of our workforce will make $40.39 per hour, or roughly $84,000 a year by the end of this agreement’s term.”
Since negotiations started this summer, Barra says GM has been available to bargain on behalf of represented team members and the company. The UAW has demanded a record contract — and that’s exactly what GM has offered for weeks now: a historic contract with record wage increases, record job security and world-class healthcare.
“It’s an offer that rewards our team members but does not put our company and their jobs at risk,” says Barra. “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.”
The company says it also is working to reduce fixed costs by “$2 billion on net of depreciation and amortization as we exit 2024.” GM is moderating the acceleration of EV production in North America to protect pricing, adjust to slower near-term growth in demand, and implement engineering efficiency and other improvements that will make GM vehicles less expensive to produce, and more profitable.
To read the full letter and reported third quarter results, visit here.
