Detroit Evening Report: Strikes trim profit at GM in an otherwise strong quarter

The ongoing strike by auto workers against General Motors is expected to cut pretax earnings by $800 million this year, and another $200 million per week after that, according to the company’s chief financial officer.

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Those are the numbers for factories the United Auto Workers union is striking against right now, so if more plants are added to the strike, the losses will pile up further. GM on Tuesday reported just over $3 billion in net income from July through September – about 7% less than a year ago due to lost production from the strike and to increased warranty costs.

UAW members also expanded the strike on Tuesday to Arlington, Texas, where 5,000 union workers walked off the job at one of GM’s most profitable plants.

The union has been on strike since Sept. 15 — nearly six weeks — against GM and its Detroit competitors, Ford Motor Company and Stellantis. The union had spared factories that make GM’s most profitable vehicles, pickup trucks and large SUVs, from its targeted strikes. Yet the UAW is demonstrating this week that risks to those money-making facilities can rise the longer the strike goes on. On Monday, for example, the union shut down Stellantis’ huge Ram pickup truck plant in Sterling Heights.

In a note to shareholders, CEO Mary Barra said GM has made a record offer to the union that will raise top factory pay to $40.39 per hour, or roughly $84,000 per year in four years. She indicated that the company is nearing how much it’s willing to pay.

“It’s an offer that rewards our team members but does not put our company and their jobs at risk,” Barra wrote. “Accepting unsustainably high costs would put our future and GM team member jobs at risk, and jeopardizing our future is something I will not do.”

The Associated Press contributed to this report.

Other headlines for Wednesday, Oct. 25, 2023:

• Henry Ford Health, Michigan State University and Detroit Pistons owner Tom Gores this week sought a combined $273 million in tax breaks and other development incentives for the proposed $3 billion joint development project in Detroit’s New Center area.
• Detroit area mothers will share their birth stories and experiences at the Southeast Michigan Perinatal Quality Improvement Coalition’s first-ever Black Women’s Health Summit, set for 8 a.m. to 4 p.m. Thursday, Oct. 26.
• The City of Detroit and One Detroit Violence Reduction Partnership is hosting a community huddle and peace march 2 p.m. Saturday, Oct. 28, at Henry Ford High School.
• Through Nov. 6, Detroit People’s Platform is calling for artists to submit work that fits the theme “Housing is Solidarity” for a chance to win a $500 prize.
• The Detroit Pistons will open its season tonight with an away game against the Miami Heat. Tip off is set for 7 p.m.
• The Detroit Red Wings had their five game winning streak snapped last night with a 5-4 loss to the Seattle Kraken in overtime. The Wings are home tomorrow against the Winnipeg Jets. Puck drops at 7 p.m. 

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