GM Estimates Strikes Cost $1.65B
DETROIT (AP) _ General Motors Corp. estimates that the recent strikes against it by the United Auto Workers union will reduce third-quarter earnings by $1.65 billion.
GM earned $1.07 billion, or $1.35 a diluted share, in the third quarter of last year. The strike-related losses could force GM to report a net loss for the quarter that ends Sept. 30.
GM lost the production of 318,000 cars and trucks from the beginning of the third quarter July 1 to July 30, when full production resumed at its North American assembly plants.
Strikes at two parts plants in Flint began in early June; the longest lasted nearly eight weeks. The resulting lack of parts forced GM to idle nearly all of its North American assembly plants.
In a filing with the U.S. Securities and Exchange Commission Friday, GM estimated the lost production in the third quarter would cost its North American operations nearly $1.3 billion and its Delphi Automotive Systems parts subsidiary about $350 million.
The estimated losses do not take into account production that will be recovered through overtime during the third and fourth quarters.
The third-quarter production loss is in addition to GM’s strike cost of nearly $1.2 billion in the second quarter. GM Chairman Jack Smith said last week that he expects the net loss from the strikes for the fiscal year to be about $2 billion after some of the production is recovered.