US automobile giant General Motors (GM) announced plans to offset the additional costs of an expected 25% increase in wages next year through structural measures. This includes significantly reducing financial support for subsidiary Cruise, which specializes in the field of robotaxis, compared to the plans for 2023.
Cruise's self-driving vehicles largely put on hold due to an accident in San Francisco, causing planned business expansion plans to be deferred.
The tariff negotiations with the US trade union United Automobile Workers (UAW), which led to significant wage increases, are expected to cost GM approximately $9.3 billion by 2028 and increase the average production costs per vehicle by about $575. For the upcoming year, the company expects additional expenses of $1.5 billion. The six-week strike by the UAW has already cost GM a considerable amount of money.
The updated forecast of the company for the current year is significantly lower than the one published before the strike, but still shows a considerable billion-dollar profit. The estimates now range from 9.1 to 9.7 billion dollars (8.3 to 8.8 billion euros), while the original forecast was between 9.3 and 10.7 billion dollars.
GM has also announced a stock buyback of ten billion dollars and a planned increase in dividends by about one third for investors. CEO Mary Barra expressed "disappointment" over production issues with batteries for the company's new electric car line and promised increased production and better profitability in the electric vehicle sector for next year.
Currently, GM continues to achieve high profits with conventional and hybrid vehicles, but electric cars are causing billions of losses. However, Barra emphasized that the company is aiming for higher growth rates in the electric business and has been preparing for a complete electrification of the future for years.
Beside Google subsidiary Waymo, Cruise was considered one of the leading companies in the field of autonomous driving. However, the accident in San Francisco, in which a woman was trapped under a robotaxi and dragged for several meters, led to a crisis in the company. Founder and CEO Kyle Vogt resigned and investigations into the accident and Cruise's communication regarding it were initiated. GM has already invested billions in Cruise and planned a rapid expansion into additional US cities as well as Tokyo by 2026.
At the New York Stock Exchange, the stock price of GM temporarily rose by 9.22 percent to 31.56 US dollars.
