General Motors' earnings approach a record level, a year after announcing it couldn't meet its employees' wage requests.
The corporation announced a boost in adjusted profits to $3.4 billion during the third quarter, surpassing the $3.2 billion from the previous year's corresponding period. The initial two weeks of the prolonged strike, spanning over six weeks, had an influence on these figures. The adjusted earnings for the first nine months stood at $9.9 billion.
Revenue witnessed a surge of over 10%, reaching $48.8 billion. This exceeded predictions by a significant $800 million and occurred at a pace faster than the 5% rise in vehicle sales. Notably, GM is selling vehicles this year at higher average prices in comparison to 2023, with the North American average transaction price touching almost $50,000.
In 2023, GM predicted that the strike would result in a financial loss of $1.1 billion. During the strike, the company asserted its inability to fulfill union wage demands without compromising competitiveness with non-union automakers. However, it eventually conceded to grant an immediate 11% wage hike and further wage increases amounting to at least another 14% over the subsequent four years.
The UAW's rallying cry during the strike was that record profits should necessarily lead to a groundbreaking contract. The agreement incorporated the highest wage hikes the union had ever secured at GM.
Despite this, GM enhanced its projected earnings for the remaining period of the year on Tuesday. The new forecast implies that the full-year earnings will surpass the impressive profit record of 2022.
The corporation's boost in profits has significantly improved its overall business performance during the third quarter. The new wage agreement with the UAW is expected to maintain the company's competitive edge in the business sector.
