Auto-industry analysts estimate that the walkout—which began Monday and involves roughly 46,000 full-time workers in more than 30 factories across 10 states—could dent GM’s profit by between $50 million and $100 million daily. Stalled production could slash more than a tenth of GM’s expected third-quarter operating profit of about $3.5 billion by the weekend, although GM could make up some lost production once workers return, analysts say.
The U.S. business is GM’s most profitable, but the strike comes at a delicate time for both the nation’s largest auto maker and the United Auto Workers union. GM is seeking to recover lost market share in the lucrative pickup-truck category, with the continuing roll out of its most extensively redesigned pickups in two decades. The Detroit company is also confronting eroding profits in China, its largest market in terms of sales, and a stalled stock price.
GM also has been cutting costs in the U.S. to try to insulate the company from a potential U.S. sales downturn after a long, healthy run. It is on track to eliminate $4.5 billion in costs by late next year as part of a restructuring announced last November, company officials have said. GM in addition has shuttered multiple plants, impacting 3,300 jobs. GM has said most of those workers were hired at other company factories.