GM says strike cost $1.1B, but it can absorb rising labor costs as it raises dividend

abcnews.go.com:

Clearly frustrated with its languishing share price, General Motors is announcing a massive stock buyback plan, raised its dividend and told investors it can absorb increased labor costs from a six-week autoworkers strike

DETROIT — Clearly frustrated with its languishing share price, General Motors on Wednesday announced a massive stock buyback plan, raised its dividend and told investors it can absorb increased labor costs from a six-week autoworkers strike.

The Detroit company said it lost production of 95,000 vehicles due to the United Auto Workers walkouts, costing the company $1.1 billion. But due to $2 billion worth of annual efficiency gains and cost reductions expected by the end of next year, the company said it can can handle $9.3 billion in labor cost increases from U.S. and Canadian union contracts through April of 2028.

The deals, GM said, will increase costs per vehicle by $500 next year and $575 by the end of the contracts, but analysts say competition will limit the company's ability to raise prices.

“We are finalizing a 2024 budget that will fully offset the incremental costs of our new labor agreements, and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently and further reducing our fixed and variable costs,” CEO Mary Barra said in a prepared statement.

On a conference call with analysts, Barra called GM's stock price “disappointing to everyone” even with record profits and cash flow. The shares, which were trading around $28 before Wednesday, were priced 15% below the 2010 initial public offering price when the company emerged from bankruptcy, she said.

The company said it plans to buy back $10 billion of its shares