The roughly six-week strike by the US union UAW, in which large income increases were achieved, is costing the company a lot of money. Savings measures are planned for 2024.
The US car giant General Motors (GM) wants to completely offset the higher costs by increasing income by 25 percent next year through austerity measures. The group also wants to spend significantly less money on its robotaxi subsidiary Cruise than in 2023. Cruise’s self-driving cars are largely at a standstill after an accident in San Francisco and expansion plans for the business are being slowed down.
The higher collective agreements will result in higher costs totaling $9.3 billion over the term until 2028 and make the production of a vehicle more expensive on average by around $575, GM said. The group expects additional costs of $1.5 billion for the coming year.
Lower prognosis
The roughly six-week strike by the US union UAW, during which the significant income increases were achieved, cost GM a lot of money. The new forecast for the current year is significantly lower, even if it still calls for a high billion-dollar profit. GM now expects a profit of between 9.1 and 9.7 billion dollars (8.3 to 8.8 billion euros), while the forecast before the strike was 9.3 to 10.7 billion dollars.
For investors, GM announced a ten billion dollar share buyback and a dividend increase of around a third. The share, which has been weak this year, temporarily rose by around nine percent in premarket trading.
Billions in losses on electric cars
GM boss Mary Barra said she was “disappointed” about production problems with batteries for the company’s new electric car range. It promised higher production and better profitability for electric vehicles next year. General Motors is currently earning very well from vehicles with combustion engines and hybrid drives, while electric cars are generating billions in losses. However, Barra emphasized that she expects higher growth rates in the electrical business and that the company has been preparing for a completely electrified future for years.
Cruise, along with Google sister company Waymo, was considered particularly advanced in autonomous driving. However, the accident in San Francisco, in which a woman trapped under a robotaxi was dragged several meters, plunged the company into crisis. Founder and boss Kyle Vogt resigned and investigations into the accident and Cruise’s communications are ongoing. GM has so far cost Cruise billions and is planning rapid expansion in more US cities and in Tokyo in 2026.
Source: Stern
