DETROIT (Reuters) – General Motors abandoned its 2023 profit forecast and short-term electric vehicle production outlook on Tuesday in the face of costs caused by a strike but reported better-than-expected performance in the third quarter.
On the New York Stock Exchange, GM shares rose 2% in pre-market trading.
The American automaker’s net profit fell 7.5% in the third quarter to $3.06 billion and its revenue increased 5.4% to $44.1 billion.
Adjusted earnings per share – $2.28 compared to $2.25 a year earlier – were higher than Wall Street’s expectations due to share buybacks.
However, the costs associated with strikes by United Auto Workers (UAW) continue to grow – they have now reached $200 million per week, Chief Financial Officer Paul Jacobson said at a press conference.
The impact reaches $200 million in the third quarter and $600 million so far in the fourth quarter, he added.
These costs, combined with the prospect of higher labor prices once a new contract is reached and the uncertain macroeconomic outlook, forced GM to abandon its financial targets for the full year.
The Detroit automaker will now ramp up production to meet customer demand and meet profitability goals, rather than chasing specific sales volume targets, Paul Jacobson said.
The group has notably decided to abandon its objective of building 400,000 electric vehicles between 2022 and mid-2024, he added.
(Reporting by Joe White, with contributions from Ben Klayman; by Mariana Abreu, edited by Blandine Hénault)
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