General Motors: Income increase of 25 percent offset by austerity measures

General Motors: Income increase of 25 percent offset by austerity measures

According to a report by www.finanzen.net,

General Motors (GM) plans to completely offset the higher costs of a 25 percent income increase next year through austerity measures. The group will also spend significantly less money on its robotaxi subsidiary Cruise than in 2023, as Cruise's self-driving cars are largely at a standstill after an accident in San Francisco and the company's expansion plans are being slowed down. The collective agreements are expected to cause a total of $9.3 billion in higher costs over the term until 2028 and make the production of a vehicle more expensive on average by around $575.

GM also announced a $10 billion share buyback and a dividend increase of around a third. GM shares were up 9.35 percent at $31.59 in NYSE trading.

The production problems with batteries for GM's new electric car range disappointed GM boss Mary Barra. However, it held out the prospect of higher production and better profitability for electric vehicles. GM is currently earning very well from vehicles with combustion engines and hybrid drives, while electric cars are making losses.

Regarding Cruise, the company was considered to be particularly advanced in autonomous driving, but the accident in San Francisco led to a crisis. Founder and CEO Kyle Vogt resigned and an investigation into the accident and Cruise's communications surrounding it is ongoing. GM has so far cost Cruise billions and has been planning rapid expansion.

These developments at General Motors may impact the market, consumers and the industry as a whole. The planned austerity measures to reduce costs could increase the company's efficiency, while the increase in income increases the purchasing power of consumers and labor costs in the automotive industry. The share buyback and dividend increase could further increase investor interest in GM.

However, the production problems of electric cars and the crisis at the robotaxi subsidiary Cruise could tarnish GM's image in terms of innovation and technology. However, the planned cost-cutting measures could help overcome these challenges and strengthen the company's long-term competitiveness.