The GM strike is now well into its third week, with roughly 50,000 United Auto Workers (UAW) union members participating in a walkout at GM facilities around the nation. In response, analysts are looking into how the strike may be affecting General Motors financially, with the latest indicating the automaker may have lost out on $1.14 billion in profit.
That figure comes from JP Morgan analyst Ryan Brinkman, who made his estimate in a note to investors on Monday.
“GM’s U.S. production stopped immediately when the UAW walked off the job September 16 and we estimate its Canadian and Mexican facilities became progressively impacted throughout the first week,” Brinkman said.
By the end of the second week of the GM strike, as the automaker’s North American production essentially ground to a halt, Brinkman said that GM lost about $575 million in potential profit, while first-week losses amounted to $480 million. Brinkman also estimated that GM is losing around $82 million in potential profit in North America for every day that the strike continues.
The JP Morgan analyst also pointed out that GM could possibly recover some of the lost profits by shifting production from the third quarter to the fourth quarter.
Outside of General Motors, the GM strike is affecting supplier companies, with Brinkman indicating that American Axle & Manufacturing Holdings Inc., as well as Tenneco Inc. were most heavily impacted by the GM strike.
Brinkman’s estimates are the latest in a line of speculation from financial experts as the GM strike drags on. Last week, we reported on a report from Credit Suisse analyst Dan Levy, who estimated that GM may have missed out on upwards of $544 million in profit, stretching up to $700 million by Sunday.
Once again, we have to mention that these numbers require a least a grain of salt. As we outlined previously, GM would only lose money if it wasn’t selling cars, and dealers still have a relatively healthy inventory to fall back on.