A strike by UAW union workers against three leading automotive companies could have a lasting impact on the future revenue and profitability of the companies involved.
One of the three companies targeted with strikes has announced a move that could be an early cost-cutting measure.
What Happened: One of the key features of the Super Bowl each year is the commercials, with private and public companies shelling out millions of dollars to advertise new products, highlight unknown brands and use celebrity endorsements to generate buzz.
Automaker General Motors Company (NYSE:GM) was among the companies that spent $6 million to $7 million for a Super Bowl commercial in 2023. The company had a joint Super Bowl ad in partnership with Netflix Inc (NASDAQ:NFLX) that imagined if electric vehicles were used more in shows and movies.
The advertisement, which starred Will Ferrell, was one minute long and highlighted vehicle models like the Chevy Silverado EV, Blazer EV, Cadillac Lyriq and GMC Hummer EV, according to Electrek.
General Motors has been featured in Super Bowl commercials the last four years with electric vehicles highlighted in the company’s ads. Commercials included using Ferrell twice, NBA star LeBron James and an “Austin Powers” movie reunion.
“We continually evaluate our media strategies to ensure they align with our business priorities,” a General Motors spokesperson told Ad Age.
The 2024 Super Bowl (Super Bowl LVIII) will be shown on CBS, a unit of Paramount Global (NASDAQ:PARA)(NASDAQ:PARAA), who is seeking to get a similar $6 million to $7 million for each 30-second advertisement.
Related Link: General Motors Q3 Earnings Beat, 5.4% Revenue Growth And More
Why It Matters: News of General Motors skipping Super Bowl LVIII comes after company CEO Mary Barra announced the launches of several electric vehicle models would be delayed as the company is “taking immediate steps to enhance the profitability of our EV portfolio.”
Barra also announced cost-cutting initiatives.
A new contract agreement with UAW employees will see base wages increase, which could mean lower profits or increased costs passed onto consumers, or a combination of both.
The impact of the strikes, which lasted for weeks, could mean billions of dollars in losses for the big three Detroit automotive companies.
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