General Motors (GM) and Ford are set to report third-quarter earnings and future guidance amid ongoing strikes and contract negotiations with the United Auto Workers union. If the automakers report better-than-expected results, it could strengthen the union’s argument for more concessions. However, being too bearish might scare Wall Street and impact their already discounted stock prices.
GM is expected to report third-quarter earnings of $1.88 per share, while Ford is estimated to report earnings of 45 cents per share. Investors will closely watch the effects of the UAW strike on the automakers’ near-term earnings and longer-term plans. The UAW has consistently used earnings reports to promote its efforts and collective bargaining.
The union initiated targeted strikes against major automakers, including GM, Ford, and Stellantis, on September 15. While the automakers have not disclosed the full impact of the strikes, estimates suggest significant losses in the third quarter. JPMorgan estimates strike costs amounted to $145 million at Ford and $191 million at GM in earnings before interest and taxes during the third quarter. These losses are expected to increase in the fourth quarter, affecting the automakers’ long-term competitiveness, particularly in electric vehicles.
Both GM and Ford have included significant wage increases and enhancements in their recent contract proposals, impacting labor costs for the automakers. The ongoing negotiations have also affected electric vehicle plans, with Ford pausing construction of a new battery plant and GM delaying production of all-electric trucks. Wall Street will closely watch for updates on EV progress and demand during the earnings reports.
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