General Motors (GM) exceeded expectations for its Q3 2024 earnings, showing strong financial performance despite facing a prolonged strike by United Auto Workers (UAW) and difficulties in the Chinese market. The automaker posted an adjusted profit of $3.4 billion, up from $3.2 billion in the same period last year, which had been impacted by the strike’s early weeks, positioning GM for record earnings in 2024.
Revenue surged more than 10% to $48.8 billion, beating forecasts by $800 million and outpacing the 5% increase in vehicle sales. This growth was largely due to the company's rising average vehicle transaction prices, which in North America reached nearly $50,000.
In a letter to shareholders, GM CEO Mary Barra attributed the Q3 earnings results to "above-average pricing, well-managed inventories and below-average incentives," and said GM is "on track to reach our 2024 EV production and profitability targets," due to its investments in a new dedicated EV platform and domestic battery cell manufacturing.
"Most of our competitors lack these advantages. And no one can match the depth and breadth of our strategic EV portfolio," Barry wrote.
The UAW strike in 2023 cost GM an estimated $1.1 billion, as the company negotiated with union leaders over wage demands. Despite initial concerns over competitiveness, GM ultimately agreed to pay raises, including an immediate 11% wage hike and further increases of at least 14% over the next four years. The deal represented the largest wage gains in UAW’s history at GM, echoing the union’s call for a "record contract" to match GM’s record profits.
Despite these increased labor costs, GM raised its earnings outlook for the year, indicating that 2024 could surpass its record-breaking profit of 2022.
"We've been able to look at that as the cost of doing business," GM CFO Paul Jacobson told reporters.
However, not all areas of GM’s business are thriving. In China, GM recorded a loss of $137 million for the quarter, in contrast to the $192 million profit it reported there a year earlier. Vehicle sales in the region dropped 37%, with GM attributing the decline to increased competition and tough market conditions.
On Oct. 22, GM shares rose 2% in premarket trading following the release of the earnings report. The stock has already increased 37% in 2024, reflecting investor confidence in the company’s ability to navigate labor disputes and inflationary pressures.
