GM Profit Sharing Takes a Hit & Some UAW Members Blame EVs

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Tesla’s recent financial reporting has gotten a lot of attention this week. Its business continues to become less focused on EVs and its already limited lineup is shrinking. Overall, Tesla is not on a positive trajectory. Sales, revenue, and earnings are down, but it is still profitable.

However, Tesla was not the only company reporting financial results. Fueled by domestic pickup and SUV sales, GM posted solid profitability in the US, beating expectations. Shares went up. While investors seemed to support GM’s retreat on EVs in North America, it racked up billions in costs associated with “EV strategic realignment.” This is projected to increase profitability in 2026, and Wall Street seems to approve. But not everyone is happy.

GM UAW employees saw a major hit to their profit sharing checks in 2025. Qualified employees receive $1,000 for every billion dollars GM reports in North America EBIT (earnings before interest and taxes). For 2025, GMNA (General Motors North America) made $10.452 billion EBIT, which rounds up to a $10,500 profit sharing check. The payout was $4000 more last year.

Like Clark Griswald in National Lampoon’s Christmas Vacation, many were counting on the money. Some likely already spent it. While “Cousin Eddie” hopefully isn’t headed over to kidnap Mary Barra, UAW members are not happy.

And, as reported by CBS News, some members are blaming EVs: “I would like our UAW representatives to stand up to the plate and go to battle with the management at GM,” said a GM employee. “Management is stumbling over their poor EV choices, forcing that EV stuff out there and people don’t want and didn’t buy, and now they’ve got to find a way to stumble through it.”

GM’s Costly Retreat

GM’s retreat from electric vehicles in 2025 was costly. According to its financial statement, its earnings took a $7.914 billion hit for cancelled contracts and other adjustments. Future products will be slower to come out. The resurrected Bolt is scheduled to die months after returning from the dead. GM likely couldn’t kill it fast enough, having already paid for line upgrades, batteries, and other components by the time policy changed, and potentially would have lost even more if those components went to waste.

However, GM was never profitable on EVs in North America, losing billions every year. Some of the EV program was justified with regulatory compliance needed to sell ICE trucks. However, Trump essentially ended the regulatory need. Despite the hit to 2025 earnings, GM’s 2026 projected profits are up due to its EV retreat. According to the shareholder deck, GM is planning to lose $1-1.5 billion less on EVs in 2026 with “significantly lower volume.”

Wall Street investors are focused on where the stock is heading, rather than where it has been, sending shares up roughly 5% on the news. We can criticize investors for not focusing on the long term, as EVs are the future, but they see the improved profitability as a good thing short term. That short-term outlook becomes even rosier for investors, with an announced $6 billion share buyback and increased dividend payments.

However, while investors are looking to make money in the future, employees collecting profit sharing checks are being compensated based on previous financial performance. Their focus is even shorter. Moving forward, they are even less likely than shareholders to support the kind of long-term investment needed to compete in EVs.

GM’s North American profits also took a $3.1 billion hit due to tariffs in 2025. However, the UAW has supported higher tariffs, and they are likely not willing to blame themselves for contributing to the reduced employee compensation.

Political Implications

This brings up one of the largest potential challenges to EVs in the US. Tariffs on imported EVs were pushed by a combination of legacy industry, the labor for those legacy industries, and legacy energy (aka, fossil fuels). The fossil fuel interests tended to support Republicans. The industry tended to be split. Unions tended to support Democrats (even if the support of their membership was more mixed). The combination was very powerful, even though they represent a small percentage of the US population. Looking at the electoral map, the UAW becomes important to the Rust Belt swing states that can decide presidential elections and legislative majorities.

Tariffs have essentially blocked the majority of imported clean technology. If unions also come out strongly against domestic EVs, then our choices will become even more limited. Fossil fuel companies will be happy to join them. Legacy industry will likely be happy to find more money on their next quarterly report. A political shift back to Democrats might not lead to as much of a policy reversal toward favoring clean technology that many of us hope.

In combination, it creates a major challenge for EVs in the US.

Something Needs To Change

Of course, the blame cannot be placed on just the union. GM did not design its EVs with a cost structure that would give them a reasonable chance of reaching profitability. In comparison, China is making it a violation for automakers to sell any model in any trim level below “manufacturing costs and period expenses composed of management expenses, financial expenses, and sales expenses.” Companies are rapidly growing profitable EV businesses globally. That is something that GMNA cannot claim currently. Neither can Ford nor Stellantis in North America. Even though Tesla’s financial picture is not as rosy as it once was, it is still far ahead in having a viable US EV business.

In addition, while Detroit’s retreat has them now moving slower on EVs, Chinese companies are accelerating. GM’s profits may be up in the short term, but they are falling farther behind. Policy may keep propping up ICE, as politically connected legacy entities become even less capable of competing on the global EV stage. That will make US industry less globally relevant overall. Eventually, US consumers may start demanding better, more affordable EVs available elsewhere. That could lead to a massive change in the market.

A course correction will require accepting the unflattering truth. US automakers are not competitive. Especially the legacy automakers who have unionized workforces. Getting on the right path will take sacrifices that go far beyond annual profit sharing. Massive business changes will be needed. Political allegiances might need to realign. Thoughts and actions will need to change. Becoming globally relevant in clean technology will require some humility and cooperation.

As Carlos Ghosn wrote in a recent Substack: “The EV race continues, but the rules have shifted. Those who adapt will thrive. Those who cling to old playbooks will stay behind. The question now is whether traditional automakers can learn fast enough to remain relevant…”