Saying the company lost some $1.1 billion due to the six-week UAW strike, General Motors announced Wednesday it is reinstating its full-year 2023 earnings guidance. The company also announced a $10 billion accelerated share repurchase program and its intention to increase its common stock dividend by 33% beginning with the January 2024 declaration.
“GM will deliver very strong profits in 2023 thanks to an exceptional portfolio of vehicles that customers love and our operating discipline,” GM Chair and CEO Mary Barra said in a release. “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,. With this clear path forward, and our strong balance sheet, we will return significant capital to shareholders.”
During 2023, GM twice raised its full-year earnings guidance before withdrawing it in the third quarter due to labor disruptions. GM’s reinstated guidance includes an estimated $1.1 billion EBIT-adjusted impact from the UAW strike, primarily from lost production.
GM now anticipates full-year 2023 capital spending to be between $11.0 billion and $11.5 billion, which is at the low end of its prior guidance range of $11 billion to $12 billion, driven by the previously announced retiming of certain product programs and more capital-efficient investment.
Barra sent a letter to shareholders Wednesday in which she said the automaker’s 2024 budget “will fully offset our increased labor costs through initiatives already underway,” the Detroit News reported.
“The profitability and cash generation of our ICE business remains strong because we’ve made strategic investments for growth in high-margin segments,” she wrote. “We’ve spent years preparing the company for an all-electric future, and our long-term EV profitability and margin goals are intact, despite recent headwinds.”
UAW workers ratified the union’s new deal with GM earlier this month, with nearly 55% of hourly employees passing the deal.
The new contract, which expires April 30, 2028, provides for 27% general wage increases, brought back benefits lost during the Great Recession and secured pathways for the organization of battery plants under the master agreements.
