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Autoworkers strike cuts into GM earnings, company sees further loses if walkouts linger

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Autoworkers strike cuts into GM earnings, company sees further loses if walkouts linger

DETROIT (AP) — A 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, the company’s chief financial officer said.

And those figures include only factories that are on strike now with less than a third of the company’s workforce on the picket lines, so if more plants are added by the United Auto Workers union, the losses will pile up further, CFO Paul Jacobson told reporters.

Those strike are already taking a toll.

GM on Tuesday posted net income of more than $3 billion from July through September, down 7% from the same period last year due to lost production from the strike, and also increased warranty costs, Jacobson said. The company also withdrew its previous full-year pretax earnings estimates, citing uncertainty over the length of the strike and how many factories would be shut down

However, excluding one-time items, GM said made $2.28 per share, handily beating Wall Street estimates of $1.87. Revenue of $44.13 billion rose 5.4% and also exceeded estimates of $42.48 billion, according to data provider FactSet.

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That sent shares up 3% before the opening bell Tuesday.

The UAW has been on strike since Sept. 15 — nearly six weeks — against GM and its Detroit competitors, Ford and Jeep maker Stellantis. So far the union has spared factories that make GM’s most profitable vehicles, pickup trucks and large SUVs, from its targeted strikes. Yet the UAW demonstrated again this week that risks to those money making facilities can rise the longer the strike goes on.

On Monday, the union shut down Stellantis’ huge Ram pickup truck plant north of Detroit in Sterling Heights, Michigan. Two weeks ago workers walked off their jobs at Ford’s largest and most profitable plant, one that makes pickups and big SUVs in Louisville, Kentucky. So far only 28% of the union’s 146,000 members at the Detroit Three are on strike.

Jacobson said the third-quarter strike loss was $200 million, since the walkouts were only in effect the final two weeks of the period. He predicted another $600 million of losses from October through December.

“We remain optimistic and hopeful that we’ll make progress and get this resolved going forward,” Jacobson told reporters.

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He said many have expressed concerns about the company taking on higher labor costs, but GM has planned for it by cutting in other areas. For example, GM’s annual fixed costs will be $2 billion lower than 2022 by the end of 2024, Jacobson said. The company also is slowing electric vehicle production to adjust to slower short-term growth in demand.

Last week GM announced that it’s postponing production at one Michigan electric pickup truck factory from this year until late 2025 to keep manufacturing in line with demand. That decision will save the company $1.5 billion next year, Jacobson said.

GM is sticking with plans to increase manufacturing capacity to 1 million EVs per year in North America by the end of 2025, he said. But earlier guidance of building 400,000 EVs in North America through the middle of next year have been scrapped. Jacobson said GM still expects to start turning low-to-mid single-digit profit margins on electric vehicles in 2025.

Demand for vehicles and prices remained strong through the third quarter, which helped keep GM’s profit high. The company’s U.S. sales rose 21%, and Jacobson said the average U.S. selling price for GM vehicles was $50,750, down only slightly from the previous quarter.

“So far the consumer has held up remarkably well for us, as evidenced by the average transaction prices,” Jacobson said. “They continue to hang in and I think exceeded most expectations that were set at the beginning of the year.”

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Jessica Caldwell, head of insights for the Edmunds.com auto site, said GM’s sales numbers looked good on the surface, but that could change in the next few months. As cold weather arrives, those in the market are usually looking for larger four-wheel-drive vehicles. But she said a lingering strike could close plants, cut production of those lucrative vehicles and “be harbingers of sales declines during an important stretch of the calendar ahead.”

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Iran's supreme leader calls on Muslims to assist Lebanon in confronting Israel

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Iran's supreme leader calls on Muslims to assist Lebanon in confronting Israel

Iran’s Supreme Leader Ayatollah Ali Khamenei called on Muslims on Saturday “to stand by the people of Lebanon and the proud Hezbollah with whatever means they have and assist them in confronting the … wicked regime (of Israel).”

In a statement after the Israeli army said it had killed Hezbollah leader Hassan Nasrallah, Khamenei said: “The fate of this region will be determined by the forces of resistance, with Hezbollah at the forefront,” state media reported.

He has been transferred to a secure location inside the country with heightened security measures in place, two regional officials briefed by Tehran told Reuters.

The sources said Iran was in constant contact with Lebanon’s Hezbollah and other regional proxy groups to determine the next step after Israel announced that it had killed Hezbollah terror chief Hassan Nasrallah in a strike on south Beirut on Friday.

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Nasrallah was killed alongside Hezbollah’s commander of the southern front, Ali Karaki, and a host of other senior Hezbollah members in a strike on Hezbollah’s military headquarters in the Lebanese capital.

Khameini in hiding: Decision comes after emergency meeting

On Friday, Khameini held an emergency meeting with top advisors in Tehran, as per the New York Times citing Iranian sources.

Airplane flies over Beirut’s southern suburbs as seen from Sin El Fil, Lebanon, September 28, 2024. (credit: REUTERS/MOHAMED AZAKIR)

Iranian Foreign Minister Abbas Araqchi accused Israel of using several US “bunker buster” bombs to strike Beirut on Friday.

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“Just this morning, the Israeli regime used several 5,000-pound bunker busters that had been gifted to them by the United States to hit residential areas in Beirut,” he told a UN Security Council meeting on the Middle East.

Further, US President Joe Biden directed the Pentagon to “assess and adjust as necessary US force posture” in the Middle East, according to the White House.

“He has also directed his team to ensure that US embassies in the region take all protective measures as appropriate,” a statement read. The White House said Biden was briefed “several times” on Friday about the Middle East. An official added that Vice President Kamala Harris was also briefed.



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North Korea expands list of crimes punishable by death: report

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North Korea expands list of crimes punishable by death: report

North Korea is expanding its list of crimes punishable by death, according to reports.

Supreme leader Kim Jong Un’s regime expanded the list of offenses warranting the death penalty from 11 to 16 via revisions of criminal law, according to Yonhap News Agency.

New offenses warranting execution as a punishment include: anti-state propaganda and agitation acts, illegal manufacturing, and the illicit use of weapons are included in the new codes. 

KIM JONG UN PROMISES TO ‘STEADILY STRENGTHEN’ NORTH KOREA’S ‘NUCLEAR FORCE’

North Korean leader Kim Jong Un delivers a speech during a meeting of Central Committee of the Workers’ Party of Korea in Pyongyang, North Korea. (Korean Central News Agency/Korea News Service via AP)

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The legal modifications were codified via multiple amendments between May 2022 and December 2023, according to a report from the Korea Institute for National Unification (KINU). 

The tightening of the criminal code is intended to strengthen the Kim regime’s grip on the population through its continued monopolization of the marketplace and military. 

Earlier this month, North Korea promised to refine its weapons development and strengthen its nuclear capabilities. 

NORTH KOREA’S KIM JONG UN REPORTEDLY ORDERED DOZENS OF OFFICIALS EXECUTED AFTER DEADLY FLOODS

Kim Jong Un made the comments Monday at a state event celebrating the country’s 76th anniversary.

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“The obvious conclusion is that the nuclear force of the DPRK and the posture capable of properly using it for ensuring the state’s right to security in any time should be more thoroughly perfected,” the dictator said.

North Korea missile launch

A 24-hour Yonhapnews TV broadcast at Yongsan Railway Station in Seoul, South Korea shows North Korean leader Kim Jong Un overseeing the test-fire of a new tactical ballistic missile, the Hwasongpho-11-Da-4.5. (Kim Jae-Hwan/SOPA Images/LightRocket via Getty Images)

“DPRK” is an abbreviation for North Korea’s official name, the Democratic People’s Republic of Korea.

Kim Jong Un warned that the United States’ increased involvement in the region has forced the regime to pursue more powerful weapons as a deterrence mechanism.

“The DPRK will steadily strengthen its nuclear force capable of fully coping with any threatening acts imposed by its nuclear-armed rival states and redouble its measures and efforts to make all the armed forces of the state, including the nuclear force, fully ready for combat,” the supreme leader said.

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The 14th Supreme People’s Assembly, the unicameral legislative body of the country, amended the national constitution last year to enshrine nuclear weaponization as a core principle.

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Eight killed in Russian drone attacks on medical centre in Sumy, Ukraine

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Eight killed in Russian drone attacks on medical centre in Sumy, Ukraine

The second attack hit the hospital in northeastern Ukraine as patients evacuated, authorities and witnesses say.

At least eight people have died in two consecutive Russian drone attacks on a medical centre in the northeast Ukrainian city of Sumy, Ukrainian officials have said.

The first attack on Saturday morning killed one person, and it was followed by another attack while patients and staff were evacuating, Ukraine’s Interior Minister Ihor Klymenko said.

Ukraine’s President Volodymyr Zelenskyy said on his Telegram channel that Russia had hit the hospital using Shahed drones, stating that eleven people were injured.

Sumy lies just across the border from Russia’s Kursk region where Kyiv launched a shock offensive on August 6, which it says is aimed partly at creating a “buffer zone” inside Russia.

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Regional prosecutors said the first attack in Sumy on Saturday took place at about 7:35am (04:35 GMT), hitting the hospital where there were 86 patients and 38 staff.

The second attack took place at about 8:25am (05:25 GMT) as rescuers and police were providing assistance and evacuating patients at the scene, prosecutors said.

Dobrobat, a volunteer group that helps repair damaged homes, wrote on Facebook that its volunteers were working at the scene when the second attack came.

It posted a video showing thick smoke, explosions and people rushing to shelter as sirens wailed.

“People are just lying on the street dead,” a volunteer said, filming himself at the scene on his phone.

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‘Victory plan’

Ukraine’s air force said it shot down 69 of 73 Russian drones launched overnight as well as two of the four missiles. City authorities in Kyiv said about 15 drones had been shot down over the Ukrainian capital and its outskirts.

In Russia, the Defence Ministry said Saturday that air defences overnight had shot down four Ukrainian drones over the Belgorod region and one over the Kursk region, both areas bordering Ukraine.

On Thursday, Zelenskyy visited the United States to lobby support for Ukraine, meeting with US President Joe Biden and Democratic Party presidential candidate Kamala Harris to detail what he has described in recent weeks as his “victory plan”.

He had previously described the five-point plan as a “bridge” towards a strong enough negotiating position for Ukraine to force Russia to end the war on Kyiv’s terms.

Before the meeting, Biden announced an additional $8bn in military aid for Ukraine, a package including the provision of Joint Standoff Weapon (JSOW) munitions to “enhance Ukraine’s long-range strike capabilities”.

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