GM and Ford report third quarter results while Wall Street and UAW watch

Ford CEO Jim Farley, left, and General Motors CEO Mary Barra

Reuters; General Motors

DETROIT – Ready to walk a tightrope?

General Motors And Ford engine are announcing third quarter results and guidance this week amid ongoing strikes and collective bargaining with the United Auto Workers union. And it’s a difficult balance.

If automakers are bullish and beat Wall Street’s expectations, it could strengthen the union’s main argument that companies can afford more concessions while profits are healthy – potentially prolonging work stoppages and contentious talks.

But if the companies, which are likely to offer many caveats in future comments, become too pessimistic about their forecasts or the impact of the UAW efforts, they risk spooking Wall Street and driving down their already reduced stock prices.

GM is expected to report third-quarter profit of $1.88 per share before Tuesday’s close, while Ford is expected to report profit of 45 cents per share after Thursday’s close. This is according to average estimates from LSEG, formerly known as Refinitiv.

While investors will certainly take note of the third-quarter results, the impact of the UAW strike and negotiations on the near-term profits and longer-term plans of Ford and GM, as well as union-represented automaker Stellantis, is also notable.

The union will also be watching.

Members of the United Auto Workers (UAW), Local 230, and their supporters walk the picket line in front of the Chrysler Corporate Parts Division in Ontario, California, on September 26, 2023.

Patrick T Fallon | AFP | Getty Images

The UAW has consistently used earnings reports and comments from executives, including GM CEO Mary Barra and Ford CEO Jim Farley, to promote its efforts and collective bargaining.

“When you’re negotiating, you want to take whatever news is in your favor and get it out in the open and to the table,” said Art Wheaton, a labor professor at Cornell University’s Worker Institute. “If GM, Ford and Stellantis are still very profitable in the third quarter, [UAW’s] I will claim: ‘You are negotiating too cheaply and should give us more.'”

The union said Friday there was “more to gain” despite automakers’ record contracts. However, an extension of the work stoppages was rejected.

Still, the targeted strikes against the three major automakers that began Sept. 15 are expected to have a larger impact in the fourth quarter than in the previous three months. The UAW has slowly expanded the work stoppages to additional assembly plants and distribution centers.

GM said the September work stoppage cost about $200 million in lost production. Ford and Stellantis, which report quarterly results on October 31, did not disclose their estimates on the impact of the strikes.

Effects of ADRs

United Auto Workers President Shawn Fain during an online broadcast briefing union members on negotiations with Detroit automakers on October 6, 2023.


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