GM Reduces 2024 Profit-Sharing Payouts for Hourly Workers
General Motors Co. has announced a reduction in profit-sharing payouts for its hourly workers in 2024. The automaker will distribute $10,500 to more than 47,000 hourly employees. This is a decrease from the record payout of up to $14,500 last year.
Financial Overview of GM
In 2023, GM reported full-year earnings of $2.7 billion, despite facing a significant fourth-quarter loss of $3.3 billion. The company’s EBIT-adjusted earnings for the year stood at $12.7 billion. According to GM’s agreement with the United Auto Workers, hourly U.S. employees receive $1,000 for every billion dollars the company earns in North America.
Impacts of 2023 Developments
The reduction in profit-sharing is attributed to various challenges, including uncertainty over tariffs and changes in administration policies affecting the electric vehicle (EV) market. This timeline coincides with GM’s recognition of approximately $4.6 billion in cash impacts due to impairment charges and costs related to broken contracts with suppliers.
- Record profit-sharing payout in 2023: up to $14,500
- 2024 profit-sharing payout: $10,500
- Full-year earnings in 2023: $2.7 billion
- Fourth-quarter loss: $3.3 billion
- EBIT-adjusted earnings: $12.7 billion
- Cash impact from impairment charges: approximately $4.6 billion
Strategic Focus on Electric Vehicles
GM’s CEO, Mary Barra, highlighted that the company’s profitability largely stems from its successful gas-powered truck and SUV lineup. Despite this achievement, there is a growing concern about the need to transition to electric vehicles globally. Analysts predict that electric vehicles will dominate the future market.
To address these concerns, GM plans to invest in EV and self-driving technologies. A significant priority for the company is the production of lower-cost lithium-ion-phosphate batteries. This strategy aims to reduce EV price points and enhance consumer interest.
Dividend and Share Repurchase
In addition to the profit-sharing announcement, GM has increased its per-share dividend by three cents. The quarterly cash dividend will be $0.18 per share, payable on March 19. This will be distributed to common stockholders who owned shares by the close of trading on March 6.
Furthermore, GM’s board of directors approved a $6 billion share repurchase authorization, solidifying the company’s commitment to enhancing shareholder value.
