Higher-Than-Expected Consequences Of The UAW Strike Did Not Erase GM's Great Recession Restructuring Era Efforts
Portfolio Pulse from Upwallstreet
General Motors (NYSE:GM) announced that despite the higher costs from new labor contracts and the UAW strike, it expects to offset these impacts and maintain its financial targets. The strike resulted in a $1.1 billion cost and lost production of 95,000 vehicles. GM revised its net income guidance to $9.1-$9.7 billion, down from $9.3-$10.7 billion, and adjusted EBIT to $11.7-$12.7 billion, down from $12-$14 billion. Capital spending will be at the lower end of the $11-$12 billion range. GM aims to cut fixed costs by $3 billion by the end of next year. Meanwhile, Tesla (NASDAQ:TSLA) is preparing for its Cybertruck event on November 30th, with deliveries starting on Thursday, although pricing and specs are not yet disclosed. Tesla's Cybertruck is expected to contribute to cash flow in a year to a year and a half.
November 29, 2023 | 7:39 pm
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NEUTRAL IMPACT
GM expects to offset the increased costs from the UAW strike and new labor contracts, maintaining its financial targets for the year. The company has revised its net income and adjusted EBIT guidance downwards and plans to cut fixed costs by $3 billion by the end of next year.
GM's announcement indicates a neutral to slightly negative short-term impact as it has revised its financial guidance downwards, but the company's efforts to offset increased costs and maintain its financial targets may reassure investors.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEUTRAL IMPACT
Tesla is preparing for its Cybertruck event on November 30th, with deliveries to start on Thursday. However, details such as pricing and specs have not been disclosed, and the Cybertruck is expected to contribute to cash flow in a year to a year and a half.
The anticipation of the Cybertruck event and the start of deliveries could have a neutral to positive short-term impact on Tesla's stock. However, the lack of details and the timeline for cash flow contribution may temper immediate investor enthusiasm.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70