General Motors employees who are also United Auto Workers union members could be in for a five-figure payout next year if the Detroit automaker keeps exceeding profit expectations.
The company employs more than 5,400 workers at its assembly plant in Arlington.
General Motors (GM) has raised its full-year profit outlook, reporting on Tuesday that its second-quarter earnings surged 59%. Adjusted earnings reached $2.7 billion, or $1.91 a share, for the quarter, up from $1.7 billion a year ago.
The company also said it expects to earn between $9.3 billion and $10.7 billion for the entire year, more than its previous earnings outlook of between $8.4 billion and $9.9 billion.
United Auto Workers (UAW) members receive $1,000 for every $1 billion the company makes in profit as part of their contract. The money is paid out in February. In 2023, eligible employees received $12,750. In 2022, the payout was $10,250, GM Authority reported.
Earnings forecasts tantalize employees and motivate company executives, but a possible strike deadline is looming for GM. It could dent profit margins.
UAW’s contract expires on September 14, and UAW President Sean Fain said the union is prepared to strike, as it did in 2019, if GM does not meet demands. Four years ago, a six-week strike against GM cost the company $2.9 billion.
GM is also facing a September strike deadline with its Canadian union, Unifor.
“There’s a direct connection between their hard work and our success,” CEO Mary Barra said in a Tuesday call with investors. “We have a long history of negotiating fair contracts. That’s the best possible outcome for all. We look forward to constructive talks.”
In a CNBC interview on Tuesday, Barra was asked if a strike could be avoided.
“We think we can find an agreement that does the right thing for our employees but also allows GM to remain competitive,” she said. “In my mind, we can get to something that meets everyone’s needs without a strike.”
GM said global vehicle sales rose 12% to 1.6 million vehicles in the quarter. Its revenue rose 25% to $44.7 billion, The New York Times reported.
“The biggest driving force behind our financial results is customer demand for our vehicles,” Barra said in a letter to employees.
GM is struggling to roll out electric vehicles as it attempts to compete with Tesla. The company has invested millions in developing a new electric car battery pack.
“It’s been a little bit challenging,” the company’s chief financial officer, Paul Jacobson, said in a conference call with reporters, according to The New York Times.
GM built only 50,000 electric vehicles in the first half of 2023, the company reported. It announced a goal in 2019 of building 400,000 electric cars between 2022 and 2024. It is ramping up to produce 1 million a year by 2025.
