GM earnings top expectations; forecast cut after strike

But the company said the strike, which effectively shut down GM's US operations for 40 days and halted its production of new cars, is expected to cut about $3 billion from 2019 earnings. The strike, which ended Friday after the United Auto Workers ratified a new contract, cut $1 billion from operating earnings in the third quarter alone and also will hit the fourth quarter.

Company officials said they were ramping production back up but would not be able to replace all of the lost car production in 2019. Nearly 50,000 US auto workers walked out last month while GM and the United Auto Workers bargained in negotiations that were challenged by expectations of a slowing auto market.

Workers won an $11,000 ratification bonus, wage increases and a freeze on health care costs in exchange for acceding to GM's plans to permanently shut four plants. GM's investor materials touted the agreement as a good compromise and said it would also permit the company to "adjust workforce in response to changing industry levels."

The contract "is foundational for improving job satisfaction, health and safety, quality and productivity, all of which will strengthen the future of this company and create shareholder value," said Chief Executive Mary Barra. "However, we have a lot of work to do in many areas as the lost profits from the work stoppage were significant."

Copyright Agence France-Presse, 2019

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