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GM beats expectations with 2023 earnings

Kalea Hall, The Detroit News on

Published in Automotive News

General Motors Co. booked net income of $10.1 billion last year, up from the $9.9 billion it made in 2022, the automaker said Tuesday.

GM's results, which beat expectations, included revenue for the year of $171.8 billion, up from the $156.7 billion the Detroit automaker collected in 2022. GM's $12.4 billion in earnings before taxes met the automaker's guidance of $11.7 billion to $12.7 billion after losing $1.1 billion during the United Auto Workers' 46-day targeted plant strike last fall. In the fourth quarter, GM made $2 billion in net income on revenue of $42.98 billion. In the fourth quarter of 2022, GM made $2 billion in net income on revenue of $43 billion.

The automaker's strong financial performance will deliver profit-sharing bonuses of up to $12,250 to about 45,000 hourly employees, per its contract with the United Auto Workers.

In 2024, GM expects adjusted earnings to be in a range of $12 billion to $14 billion. The automaker is heading into the year with pressure on its plans to expand its EV offerings and showcase the technology of its autonomous vehicle unit Cruise LLC, which has come under severe scrutiny for its safety after one of its robotaxis in October hit a pedestrian, dragging the person 20 feet on a San Francisco street.

"As we look ahead, our priorities and commitments are clear. They are to maximize the opportunities we have with our winning ICE portfolio with new models like the 2024 Chevrolet Traverse and 2025 Chevrolet Equinox; grow our EV business profitably; deliver strong margins and cash flow; and refocus and relaunch Cruise," GM CEO Mary Barra wrote in a letter to shareholders.

She noted GM expects its U.S. EV business "will become variable profit positive in the second half of the year based on our current expectations for EV demand and production growth, strong interest in our vehicles, lower commodity prices and other factors."

Barra acknowledged "the pace of EV growth has slowed, which has created some uncertainty," but GM still looks at third-party forecasts estimating U.S. EV deliveries will rise from 7% of the industry last year to at least 10% this year.

In 2023, GM experienced unexpected delays with EV production because an unnamed automation equipment supplier struggled with delivery issues, which constrained module assembly.

 

Barra expects GM's "competitive position" with EVs will improve throughout 2024 with increased production of the Cadillac Lyriq electric crossover, GMC Hummer EV, Chevrolet Silverado EV Work Truck and Blazer EV; GM has a stop sale on the latter vehicle for a software glitch. GM also will launch production this year of the Chevrolet Equinox EV, Silverado EV RST for retail customers, GMC Sierra EV Denali and the Cadillac Escalade IQ this year.

On the Cruise front, last week GM released a law firm's review of the AV unit's handling of the pedestrian accident and revealed it's being investigated by the U.S. Department of Justice and the Securities and Exchange Commission for the incident.

Barra told shareholders the company has already started "to implement significant changes because of these reviews."

"At Cruise, we are committed to earning back the trust of regulators and the public through ourcommitments and our actions," Barra said.

GM's net income margins for the year were 5.9%. Pre-tax earnings in GM North America totaled $12.3 billion, down from $13 billion in 2022. GM International's pre-tax earnings were $1.2 billion, up slightly from $1.1 billion in 2022.

GM sold 2.6 million vehicles in the United States in 2023, up 14% from 2022. The increase in GM's sales, which were on par with expectations, comes as the industry overall ends a surprisingly strong year thanks to improved supply levels and increases in incentives. GM's 2023 sales were the best for the automaker since 2019, when it sold 2.9 million vehicles in the United States.

Ford Motor Co. reports its earnings after the market closes on Feb. 6. Stellantis NV reports at 8 a.m. Feb. 15.


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