GM says pretax earnings took $1.1B hit from autoworkers strike, but says it can absorb costs of deal
DETROIT (AP) — General Motors says pretax earnings took a $1.1 billion hit this year from a six-week strike by autoworkers, but the company expects to absorb the costs of a new contract and is even raising its dividend.
The Detroit automaker on Wednesday reinstated its full-year earnings forecast that was withdrawn after the United Auto Workers began targeting the factories of Detroit automakers with strikes on Sept. 15. Those strikes continued at GM until Oct. 30.
The company now predicts full-year net income of $9.1 billion to $9.7 billion, down from its previous outlook of $9.3 billion to $10.7 billion. But GM expects to generate more cash for the full year. It expects free cash flow of $10.5 billion to $11.5 billion, an increase from a previous forecast of $7 billion to $9 billion.
To get there, GM expects to cut capital spending, including a slowdown in spending on electric vehicles and at Cruise, its troubled autonomous vehicle unit. California regulators revoked the San Francisco-based subsidiary’s robotaxi license last month after one of its vehicles dragged a pedestrian to the side of a street after the person was hit by another car.
GM says it will raise the dividend 33% to 12 cents per share starting in January. It’s also planning to buy back $10 billion of its stock shares.
“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,” CEO Mary Barra said in a statement.