A six-week strike by UAW workers in the US has put a USD1bn dent in General Motors' earnings so far this year. The company has also been hit by slower sales in China according to its latest quarterly earnings results.
However, strong sales of trucks in the US helped it to achieve income of USD2.3bn in the quarter ended September 30, a decline of just 8.7% on last year. Revenues for the quarter were 0.9% below last year's pace at USD35.5bn.
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GM said the strike had a negative USD1bn impact on adjusted EBIT in the quarter, with two weeks of vehicle production lost in Q3.
Despite the effects of the strike in the US at the end of the quarter, GM reported strong sales of trucks in the market with sales of the Chevrolet Silverado and GMC Sierra LD models up by 18% and 38% respectively. GM said that overall pricing of GM's new pickups remained strong, up about USD2,200 year to date versus 2018.
US dealerships delivered nearly 739,000 vehicles in the third quarter of 2019, an increase of 6% year over year.
In China, Q3 sales declined nearly 11% over last year and GM said that its China business unit underperformed relative to the industry, 'due to segment shifts and lower demand for outgoing models'.
There was some good news on the cost front. GM said it has achieved USD2.4bn in transformation cost savings since 2018, and is on track to realize its 2019 target. However, as a result of the company's decision to invest in its Detroit-Hamtramck plant with plans to build an all-electric pickup truck, GM said it will incur operating costs outside of the scope of its original transformation plan. With this, GM is revising its year-end 2020 cost savings target to USD4.0 to USD4.5bn.
CEO Mary Barra highlighted the UAW contract agreement. She said: "Our new labour agreement maintains our competitiveness, preserves our operating flexibility and allows us to continue improving our quality and productivity. We remain focused on strengthening our core business and leading in the future of personal mobility."
