GM says UAW strike cost $1.1 billion, but 2023 profits will be 'very strong'

General Motors on Wednesday said that a strike by United Auto Workers members cost the company $1.1 billion as it reinstated its 2023 earnings guidance. File Photo by Aaron Josefczyk/UPI
General Motors on Wednesday said that a strike by United Auto Workers members cost the company $1.1 billion as it reinstated its 2023 earnings guidance. File Photo by Aaron Josefczyk/UPI

Nov. 29 (UPI) -- General Motors said Wednesday the United Auto Workers strike cost the company $1.1 billion as it reinstated its full-year 2023 earnings guidance.

In 2023 GM twice increased its earnings guidance -- an official company prediction of near-term profits and losses, expressed as an amount of money per share -- but withdrew them when the UAW went on strike.

"We are finalizing a 2024 budget that will fully offset the incremental costs of our new labor agreements and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently, and further reducing our fixed and variable costs," GM CEO Mary Barra said in a statement.

Barra added that GM "will deliver very strong profits in 2023."

The stockholders' net income outlook is $9.1-$9.7 billion, while the previous numbers were $9.3-$10.7 billion.

GM CEO Mary Barra said in a statement GM's 2023 profits are "very strong" despite the losses from the strike. File Pool Photo by Olivier Douliery/UPI
GM CEO Mary Barra said in a statement GM's 2023 profits are "very strong" despite the losses from the strike. File Pool Photo by Olivier Douliery/UPI

GM's Wednesday announcement said it anticipates 2023 capital spending to be $11-$11.5 billion, down slightly from its previous guidance of $11-$12 billion.

GM said its net automotive operating cash is expected to increase to $19.5-$21 billion. The previous outlook was $$17.4 billion-$20.4 billion.

The deal between GM and UAW included hourly pay raises of at least 25%, reinstated cost-of-living adjustments and enhanced profit-sharing payments as well as other benefits.

The company said the contracts with UAW and Unifor in Canada will increase costs by $9.3 billion leading to a rise of $575 in costs per vehicle.

GM on Wednesday also announced a $10 billion stock buyback that is expected to end in the fourth quarter of 2024 and a 33% increase in common stock dividends.

GM expects to boost its common stock dividend by 3 cents to 12 cents starting in 2024.

GM has canceled the revolving $6 billion line of credit began in October, replacing it with a new 364-day credit facility of $3 billion.