GM reports decrease in North American revenue
By Kalea Hall
LORDSTOWN
General Motors made $2.1 billion in North America during the third quarter of 2017, down from last year’s $3.6 billion.
For every billion brought in, eligible hourly employees receive $1,000 in profit sharing.
So far this year, GM’s North American segment has brought in $9 billion, down from last year’s $9.7 billion.
In 2016, up to 52,000 employees had the opportunity to receive up to $12,000 in a record profit-sharing payout.
The amount workers receive is dependent upon how many hours they’ve worked, according to the United Auto Workers/GM agreement.
Profit sharing impacts the local economy through the Lordstown Assembly Complex where 3,000 are employed to build the Chevrolet Cruze.
“What it does is increase disposable income, and we see that being put to use in a variety of ways, usually in consumer spending,” PNC economist Mekael Teshome said. “Some of it does get saved. The impact is not permanent, but it is a little shot in the arm.”
Overall, the Detroit automaker reported a net loss of $3 billion compared with last year’s profit of $2.8 billion due to the sale of its Opel/Vauxhall brands in Europe.
But the North American, South American, Chinese and other Asian segments were all profitable for the first time since the fourth quarter of 2014.
“GM earnings were better than expected despite the loss because of the European operations being sold,” said Michelle Krebs, senior analyst for AutoTrader. “What was obvious is they will continue to balance demand with production, particularly on the passenger cars. GM is demonstrating good discipline in terms of cutting its costs and keeping production in line with demand.”
On a Tuesday conference call with investors, GM discussed how it continues to adjust its production with passenger vehicles. GM Lordstown had several down weeks this year to align with slowing demand of the Cruze. GM said earlier this month it will idle production at the Detroit-Hamtramck Assembly plant for five weeks, laying off 1,500 workers to control the inventory of the cars it produces. Detroit-Hamtramck produces the Chevrolet Impala, Cadillac CT6, Buick Lacrosse and Chevrolet Volt gas-electric hybrid. It will be shut down through the end of the year starting Nov. 20.
“I am very happy with where GM is at,” said Robert Morales, president of UAW Local 1714. “The focus is on the customers and being profitable. We know where the market is headed, but we are still focused on building a quality vehicle for our customers.”
Glenn Johnson, president of UAW Local 1112, said GM is doing the right things and it shows in the earnings.
“We are proud of the company for making the decisions they are making as far as keeping our company stable,” Johnson said.