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GM says UAW strike cost $1.1 billion, reinstates full-year guidance

Kalea Hall, The Detroit News on

Published in Business News

After losing an estimated $1.1 billion in operating profit during the United Auto Workers' 46-day strike, General Motors Co. is reinstating a full-year guidance of $11.7 billion $12.7 billion in operating profit, the company said Wednesday.

GM also announced a $10 billion accelerated share repurchase (ASR) program and that it intends to increase its common stock dividend by 33% beginning with the January 2024 declaration.

GM's stock jumped 10.2% by mid-morning after the announcement.

“GM will deliver very strong profits in 2023 thanks to an exceptional portfolio of vehicles that customers love and our operating discipline,” GM Chair and CEO Mary Barra said in a statement.

“We are finalizing a 2024 budget that will fully offset the incremental costs of our new labor agreements and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently, and further reducing our fixed and variable costs,” she added. “With this clear path forward, and our strong balance sheet, we will return significant capital to shareholders.”

With the ASR program, GM says it will advance an aggregate of $10 billion to the executing banks and immediately receive and retire $6.8 billion worth of GM’s common stock. The automaker had 1.37 billion shares of common stock outstanding prior to the ASR. The program is expected to conclude in the fourth quarter of 2024.

 

GM expects to increase the common stock dividend by 3 cents per quarter to 12 cents beginning in 2024.

Before the UAW's strike that kicked off against all three Detroit automakers on Sept. 15 and lasted until the end of October, GM had raised its full-year guidance twice before withdrawing it in the third quarter during the union's targeted plant work stoppage.

GM's new operating profit guidance of $11.7 billion-$12.7 billion is down from the previous outlook of $12 billion-$14 billion. GM expects net income attributable to stockholders will be $9.1 billion-$9.7 billion, which is down from the previous outlook of $9.3 billion-$10.7 billion.

GM now anticipates full-year 2023 capital spending will be between $11 billion-$11.5 billion, which is at the low end of its prior guidance range of $11 billion-$12 billion, as a result of retiming certain product programs and having more capital-efficient investment.

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