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As UAW strikes continue, GM and Ford will release Q3 2023 profits

As the United Auto Workers (UAW) union is still engaged in ongoing strikes and contract discussions this week, General Motors (GM) and Ford will release their third-quarter financial results. 

A lot depends on the reports, and as CNBC notes in a story on Sunday, the UAW would probably use any optimism and achievements compared to Wall Street estimates revealed by the automakers to press for more concessions in contract discussions. On the other hand, if the effects of UAW labor actions or widespread pessimism on guidance become apparent, the corporations risk scaring off investors.

According to information from LSEG (previously Refinitiv), Wall Street analysts anticipate GM to post earnings of $1.88 per share in the third quarter while expecting Ford to produce $0.45 per share.

According to the business website, GM will announce its third quarter 2023 financial results on Tuesday at 6:30 a.m. ET. At 8:30 a.m. ET following the meeting, GM will also have a conference call.

According to a press release, Ford will present its financial results for the third quarter of 2023 on Thursday at 4:05 p.m. ET. The carmaker will host an earnings call after the online event at 5:00 p.m. ET. The livestream for the online event may be found here.

The "Big Three" of Detroit—Ford, GM, and Chrysler-parent Stellantis—executive earnings reports and public remarks have been sources of information for the UAW during the contract discussions.


Ford

"When you're in bargaining, you want to use every piece of news that's in your favor and bring it up and bring it to the public and the table," says Art Wheaton, Cornell University professor of labor at the Worker Institute. "If GM, Ford, and Stellantis are still very profitable for the third quarter, [UAW's] going to claim that, 'They're being too cheap in bargaining, and they should give us more.'"

Although the automakers have recently made significant concessions in contract talks, UAW President Shawn Fain remarked on Friday that all of the businesses were "extremely profitable," adding that there is still "more to be won." The announcements coincided with Ford firing 364 more employees across two states.

Ford lost $145 million in Q3 before interest and taxes, according to a JPMorgan estimate, while GM lost $191 million, according to the same estimate. The company estimates that losses for Ford and GM in Q4 thus far have climbed to $517 million and $507 million, respectively.

The projections follow a strike by Ford employees earlier this month at the highly profitable Kentucky Truck Plant, which builds the F-Series Super Duty truck, the Expedition, and the Lincoln Navigator SUV.

Furthermore, if labor initiatives are successful, many experts believe that labor expenses will be included in car prices, passing those costs on to customers. Based on the most recent offers to the UAW, Wolfe Research analyst Rod Lache forecast last Monday that labor costs would rise by $3,000 to $4,000 per car. At the same time, he anticipates a $2,500–$3,000 rise in rival expenses.

Lache states, "This might exacerbate other difficulties that the OEMs [original equipment manufacturers] confront, such as battery competitiveness, distribution, and design. Additionally, we are concerned that the OEMs might not yet fully understand the long-term dangers connected to the UAW's new strategy, which includes public bargaining, social media, and populism. The automakers are having trouble accepting this fact.

The announcement follows Tesla's release of its Q3 earnings last week, which showed non-GAAP earnings per share of $0.53, falling short of $0.64 per share estimates on Wall Street. The non-union carmaker also reported $23.35 billion in sales for the quarter when experts had predicted it would report $23.9 billion.

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