GM stock value hit a new low this week, dipping to $28.01 per share before the end of trading Tuesday. The decline in value follows a string of bad news for the automaker, including an expansion to the ongoing UAW labor strike. GM released its third quarter earnings report earlier Tuesday.
GM’s Q3 earnings were highlighted by $44.1 billion in global revenue, an increase of 5.4 percent, while net profit margins eased by 6.9 percent. Third-quarter net income fell 7.3 percent to $3.1 billion, while adjusted earnings before interest and taxes was down to $3.6 billion, a decline of 17 percent.
One of the most impactful factors influencing GM stock value continues to be the UAW labor strike. Just hours after GM released its Q3 earnings, the UAW announced it was expanding its strike to include the GM Arlington plant in Texas, considered the most-profitable auto plant in the world. The GM Arlington facility produces The General’s full-size SUVs, including the Cadillac Escalade, Chevy Suburban, Chevy Tahoe, and GMC Yukon. The UAW strike also currently includes walkouts at the GM Wentzville plant in Missouri, the GM Lansing Delta Township plant in Michigan, and 18 parts and distribution centers. GM has also furloughed workers at its Fairfax Assembly plant in Kansas and metalworking plants due to a lack of work.
GM estimates that the strike has cost the automaker $800 million so far, with a further $200 million expected to be added to the cost each week. Those costs do not include the impact of the most recent walkout at the GM Arlington plant.
GM has also announced that it will delay the launch of three all-electric products, specifically the Chevy Equinox EV, the Chevy Silverado EV RST, and the GMC Sierra EV Denali. GM CEO Mary Barra said that the delay will help the automaker optimize its software strategy with the vehicles and will help drive significant revenue growth from subscriptions in the future.
Finally, GM’s autonomous vehicle division, Cruise, will suspend driverless operations in San Francisco following the immediate suspension of its AV testing permits. Cruise is currently facing an investigation by the NHTSA over concerns regarding pedestrian safety.
GM stock value fell below $30 per share for the first time in three years on October 5th, 2023. Prior to the low recorded earlier this month, the last time GM stock fell below $30 per share was October 2nd, 2020.
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Comments
Blame 100% of it on management stupidity.
A good buying opportunity.
gm is the next Apple or Amazon.
gm = the next Lucasfilm
Mary Barra = Kathleen Kennedy
I’m worried that Mary Barra is more like Dan Ustian than Elon Musk. I’m not impressed with her doubling and tripling down on products that take much longer than expected to develop or aren’t demanded at all while she’s also canceling ICE products that people actually love. I do think she’s investing in tech that we know works….but the lopsided scale up is a huge and costly mistake.
I was on the side of the UAW when it comes to seeking raises and better benefits and work/life balance. But upon more detailed reading – I now think their asks are legitimately insane. They are a cancer to those companies; and their asks are already indicative of them not negotiating in good faith. I don’t see a long term future for them if GM, Ford and Stellantis start having labor cost issues again. That’s a huge part of what got those companies in a tight position in the recession. Let’s not repeat that.
I’d gladly take a GM car built in Mexico over a car made by economic terrorists that is the modern union.