The United Auto Workers union strike at GM was a bit costlier than originally thought, but it wasn’t enough to stop the company from posting a $6.7 billion profit last year.
The nation’s largest automaker reported a 17% drop in earnings for the year, along with a 7% decline in revenue. It said the strike cost it $3.6 billion during the course of the year, up from its initial estimate of $2.9 billion, which the company announced in October.
Part of its full-year profit from a $300 million gain it posted from its earlier investment in Lyft, which went public during the year.
For the final three months of the quarter, which included nearly a month of the strike, GM posted a loss of $194 million, compared to a $2 billion profit from a year earlier. The strike cost it $2.6 billion in the quarter, as its dealers bought 191,000 fewer vehicles during the period due to the lack of production.
The strike lasted 41 days, as nearly 50,000 hourly workers were off the job, shutting 31 GM factories and 21 other facilities. It was the longest strike in the industry in decades.
Because the company was still profitable for the year, the UAW members who went on strike will get a profit sharing bonus of about $8,000 each, according to the union. That’s more than the $6,600 profit sharing payment that UAW members at Ford will receive, despite the fact that the Ford workers did not strike. But Ford reported disappointing results for the year Tuesday night.
“UAW General Motors workers throughout the strike last fall said … that they build quality vehicles that make excellent profits,” said Terry Dittes, the union’s chief negotiator with GM. “Much was made about the cost of the strike, but consider the fact that even with a strike, General Motors North American made a significant profit.”
