UAW strike cost GM $200 million in its first two weeks
By Chris Isidore, CNN
New York (CNN) — The United Auto Workers union strike has cost General Motors $200 million since the work stoppage began two weeks ago, the company said Wednesday.
The loss runs through the end of the third quarter, which closed on September 30. GM was relatively flush with cash heading into the strike, which started on September 15. Its strong cash position, and the record profits it earned in 2022 and the first half of this year, has spurred the UAW to demand significant increases in pay and benefits for its members.
The UAW is waging targeted strikes against not just GM but also its rivals Ford and Stellantis, which builds vehicles for the US market under the Jeep, Ram, Dodge and Chrysler brand. Neither Ford nor Stellantis would disclose the amount of their losses from the strike when asked.
For the first week of the strike, the UAW shut down just one assembly line at each company, although the closure of the Wentzville, Missouri, plant for GM forced it to also shut operations at the nearby Fairfax Assembly plant in Kansas City, Kansas, since the Fairfax plant depends on stampings from Wentzville.
During the second week, the UAW also went on strike at a series of 18 parts and distribution centers operated by GM as well as 20 at Stellantis. And this past Friday, the second-to-last day of the quarter, it went on strike at GM’s Lansing Delta Township Assembly plant, as well as the Ford assembly plant in Chicago.
But GM still reported it had strong third quarter car sales, up 21% compared to a year earlier. Back then it was a lack of parts, particularly computer chips, that limited its production and the inventory of vehicles on its dealerships’ lots. It ended the most recent quarter with the most vehicles in inventory at its US dealerships since 2020, in the early months of the pandemic.
GM had earlier reported cash on hand of $23.1 billion as of June 30, up from $19.2 billion at the start of the year. Excluding cash set aside for GM Financial and its “Cruise” unit that is working on developing self-driving vehicles, GM has about $16 billion in what it classifies as “automotive cash.”
Including lines of credit, GM said it has about $39 billion in liquidity available at the end of the second quarter. This week, GM arranged for a new $6 billion line of credit.
“The business has continued to perform well since the [end of the second quarter],” said GM. “The new facility raises our liquidity by $6 billion. We are being prudent in the face of uncertainty.”
The union declined to comment on the loan.
GM lost $2.9 billion from a six-week strike the UAW waged against it in 2019. But that strike was against all of the company’s US operations. And the union was not striking Ford and Stellantis while it was striking GM in 2019, so its rivals’ operations were not disrupted.
GM disclosed the loan in a filing Wednesday with the Securities and Exchange Commission. In 2019, it went through the six week strike without disclosing any additional borrowing event though it went into the 2019 strike with less cash on hand, with $17.1 billion in total cash, and $11.4 billion in automotive cash.
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