General Motors has withdrawn its previous guidance for 2023 profits as the cost of a series of strikes rose to $200 million a week.
The company has abandoned a target of $12 billion to $14 billion in full-year profit before interest and other deductions.
Paul Jacobson, the chief financial officer, revealed the extent of the industrial action by the United Auto Workers (UAW) union, which started in mid-September. He said the strikes cost GM $200 million in the third quarter and $600 million so far this quarter due to lost vehicle production.
General Motors reported a $3.1 billion third quarter net profit, 7.3 per cent lower than the third quarter of last year.
Mary Barra, the chief executive, said General Motors was slowing the launch of several electric car models to cut costs and pulling back on electric vehicle spending to put profits ahead of sales targets.
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The Chevrolet and Cadillac manufacturer abandoned its previous target to build 400,000 electric vehicles between 2022 and mid-2023. Instead, the group is aiming to have one million electric vehicles in production by the end of 2025.
Barra said in a shareholders’ letter that General Motors had offered UAW “a historic contract with record wage increases, record job security and world-class healthcare”.
She said she refused, however, to “jeopardise” the company’s future by “accepting unsustainably high costs”.
The UAW has been striking at General Motors, Ford and Stellantis, which combined produce about 50 per cent of the vehicles manufactured in the US each year. The union is demanding wages that account for inflation and restoration of overtime and retirement benefits.
