NEW YORK -- The UAW strike at General Motors, currently in its third week, may have already cost the carmaker over $1 billion, JPMorgan analyst Ryan Brinkman wrote in a note to clients.
The analyst estimated the cost to date to be around $1.14 billion. Brinkman said it was likely that GM will be able to recover a portion of the lost profits by shifting production from third quarter into fourth quarter. GM is estimated to be losing about $82 million of potential profit in North America every day the strike wears on, Brinkman said.
In its second week, when virtually all of GM’s North American assembly was off-line, the strike led to the carmaker losing about $575 million of potential profit, Brinkman said. In the first week, the losses were a little lower, at about $480 million, given only partial shutdown of Canadian and Mexican assembly lines.
GM shares fell 3.7 percent to close at $36.11 in New York on Tuesday.
Among auto suppliers, Brinkman estimated American Axle & Manufacturing Holdings Inc. and Tenneco Inc. were the most impacted. Most of the large North American suppliers have not yet disclosed the impact the strike will have on their finances this year.
“Cash impact to bite right away at GM but likely not until fourth-quarter for suppliers,” the analyst wrote, adding that since suppliers are typically paid by automakers only after about 60 days or more, they possibly won’t feel the cash impact of the strike until the fourth quarter.