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GM Announces $10 Billion Stock Buyback and 33% Dividend Increase Amid Labor Cost Increases

Despite a $9.3 billion hit from new labor contracts and a six-week UAW strike costing $1.1 billion, GM expects to offset these costs with efficiency gains and cost reductions.

Overview

  • General Motors (GM) has announced a $10 billion stock buyback plan, a 33% dividend increase, and plans to cut spending at its troubled robotaxi unit, Cruise.
  • GM's new labor contracts with the United Auto Workers (UAW) and Canadian union Unifor will cost the company $9.3 billion through 2028, translating to about $575 per vehicle over the life of the deals.
  • Despite a six-week UAW strike costing the company $1.1 billion in lost production, GM expects to offset these costs with $2 billion worth of annual efficiency gains and cost reductions by the end of next year.
  • GM's stock price rose 9.38% following the announcement, but shares are still down over 20% in the past year.
  • GM CEO Mary Barra has expressed disappointment with the company's electric vehicle production due to difficulties in assembling batteries, but expects higher EV production and improved margins in 2024.