GM 3Q profit falls 7% as UAW strike cuts production
DETROIT — Only two weeks of a lengthy strike against General Motors took place in the third quarter, but that was enough to dent the company’s net profit by about $1 billion.
GM’s third-quarter net income fell 7 percent as a strike by the United Auto Workers union brought its U.S. factories to a standstill.
The Detroit automaker still made $2.35 billion, or $1.60 per share, but the strike cost it 52 cents per share of earnings.
Most of the impact from the 40-day strike will hit in the fourth quarter, and GM said Tuesday that it will wind up costing the company $2.86 billion in profits for the full year.
The strike forced the company to cut its full-year pretax profit guidance from $6.50 to $7 per share, to $4.50 to $4.80.
Excluding one-time restructuring costs, the company made $1.72 per share, beating Wall Street estimates of $1.38, according to data provider FactSet.
Revenue fell 0.9 percent to $35.47 billion, but still surpassed analyst estimates of $34.95 billion.
GM shares rose 4.5 percent to $38.29 Tuesday.
The 49,000 workers, who ended their strike on Friday, were able to win a mix of pay raises and lump sum payments. They also got an $11,000-per-worker signing bonus, faster pay raises for newly hired employees and a path to full-time work for temporary workers. Workers kept their top-notch health insurance.
