General Motors and Ford have laid out ambitious plans to spend billions developing new electric vehicles while returning capital to investors, all funded by robust profits from combustion trucks and SUVs.
The mounting costs of the United Auto Workers strikes, and the eventual rich contract settlements, are putting those plans at risk, analysts said.
The strikes have costing GM and Ford more than $500 million, JP Morgan analyst Ryan Brinkman estimated in a note Monday. Ford is now losing $44 million a day, while GM is losing $21 million a day, Brinkman estimated. Ford spent $3.8 billion on dividends through the first half of this year, according to its most recent financial report. The company told investors in May it planned to distribute 40% to 50% of free cash flow to investors each year via dividends and share buybacks.
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