The deal with the United Auto Workers (UAW) union, reached after weeks of tense negotiations, will add about $900 in labor costs per vehicle by 2028, which Ford said it would work to offset by cutting costs elsewhere.
Bullshit.
GM also announced $10 billion in share buybacks and a 33% dividend increase to boost its sagging share price.
But yeah, fuck those workers, they are the problem. Damn unions ruining everything! Meanwhile the executives and shareholders are laughing all the way to the bank.
Mary Barra bonus increase incoming…
Their buyback plan was actually kicked off in 2022. They temporarily paused it during the strike and resumed it. There are lots of legitimate reasons they would want to buy back shares - if they are using shares as payment for debt it keeps their interest rate lower.
Regardless, even with the buybacks, their share price is still lower than when the strikes began.
shareholders are laughing all the way to the bank
I shouldn’t have to be the one to tell you this, but the benefits unions fight for, like pensions and health plans, are largely stored on asset markets. Unions are not fighting to destroy the stock market.
Regardless, even with the buybacks, their share price is still lower than when the strikes began.
This is key — GM would want to do a buyback if they think the stock is undervalued, which if they have a plan to deal with the additional costs, it is.
Considering they have a PE of 4, it very well probably is. The program is a single year of net income.
They also both complain that EV’s are working for them, and then do a share buy back instead of sticking that 10 billion dollars into building better EV’s. These giants are going to head for bankruptcy in the end because they are too busy appeasing shareholders and not innovating and becoming leaders.
And yet:
The automaker now expects adjusted earnings before interest and taxes (EBIT) of $10 billion to $10.5 billion for 2023, down from its prior forecast of $11 billion to $12 billion offered in July.
A decrease in earnings of ~16% is very high
Yup, all the doomerism in their public relations campaigns about how these deals with workers will cripple them is just a bunch of nonsense