The United Auto Workers (UAW) labor union ratified its new contract with GM earlier this month following a six-week strike that affected multiple General Motors production facilities. During the strike, the UAW implemented a targeted strategy that called for union members to walkout at specific facilities, rather than all facilities all at once. Now, General Motors is estimating that it lost $1.1 billion as a result of the strike.
Earlier today, General Motors announced new earnings guidance for 2023, as well as a $10 billion accelerated share repurchase program intended to increase the company’s common stock dividend by 33 percent. The statement also addressed losses incurred during the 2023 UAW strike.
“GM’s reinstated guidance includes an estimated $1.1 billion EBIT-adjusted impact from the UAW strike, primarily from lost production,” the automaker states.
It’s estimated that the 46-day strike resulted in lost production amounting to some 95,000 units, with the Chevy Colorado, GMC Canyon, Chevy Traverse, and Buick Enclave bearing the brunt of the impact.
The UAW strike began in September following the expiration of the previous labor contract, with the union targeting the GM Wentzville plant in Missouri as the initial strike target. The Wentzville facility produces the Chevy Colorado and GMC Canyon pickup trucks, as well as the Chevy Express and GMC Savana vans.
The UAW later expanded the strike to include several other General Motors facilities, such as the automaker’s Lansing Delta Township plant in Michigan, the automaker’s Arlington plant in Texas, the automaker’s Spring Hill plant in Tennessee, as well as 18 parts distribution centers around the nation. The strike also resulted in several negative ripple effects downstream, with General Motors furloughing workers at various facilities due to a lack of work, including its Fairfax plant in Kansas.
The new UAW contract includes wage increases, a signing bonus, and benefits that will result in a $200 million hit through 2023. The total incremental cost of the new contract over the life of the agreement is estimated at $9.3 billion.
The UAW represents 46,000 General Motors workers, as well as 146,000 workers across The Big Three Detroit automakers (General Motors, Ford, and Stellantis).
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Comments
“Lost” is a fudgeable #.
How many people actually went out and bought a competitor to the Colorado/Sonoma?.
Full size SUVs have been in short supply for a long time and many people just play the wait game instead of jumping ship to a competitor.
Can someone explain why GM pays a signing bonus for workers that were on vacation for 6 weeks? I get it if they signed quickly, like within a week, but 6 weeks is too long to justify a signing bonus.
GM paid their executives a crazy amount of money and you don’t think the one’s doing the hard labor to actually build these vehicles don’t want in on those record profits?
GM is just as guilty as UAW at letting the strikes last as long as they did.
gm management is completely to blame for the strike. It’s not like the contract expiration date was a mystery. Any decent management team would have sat down with Fain long before any deadline. Unfortunately decent management and gm haven’t been used in the same sentence since the seventies!
It hard to sit down with folks who don’t show a true desire to negotiate.
The initial ask for a 4-day work week was completely untenable in a manufacturing facility.
At the end, the contract simply made up for lost wages and expected inflation – AKA didn’t move anything forward. Seems like they could have just started with a 26% increase ask + forward COL + signing bonus and called it a day.
A strike was needed to give a little relief to the dog-pony show going on in DC by those who say they support “the American workers” while voting to offshore/outsource them.