Cleveland, Ohio – General Motors’ earnings fell nearly 90% in Q1, but the company stayed in the black, unlike cross-town rivals Ford ($2 billion Q1 loss) and Fiat Chrysler Automobiles ($1.9 billion Q1 loss). More importantly, it stockpiled cash to provide operating funds needed if COVID-19 related plant closures continue to drag on the economy.
And, as with Ford and FCA, officials at the company say GM hopes to restart its North American plants on May 18. As with FCA’s announcement earlier this week, theUnited Auto Workers (UAW) said it would not oppose the restart.
“I am proud to stand with our best as we confront these challenges together – as one team – while we continue our transformation,” GM Chairman and CEO Mary Barra said. “We have a track record of making swift, strategic and tough decisions to ensure our long-term viability and create value for all of our stakeholders.”
The biggest difference in GM’s numbers vs. Ford and FCA was a pickup-driven profit. Chevrolet Silverado and GMC Sierra models lost some market share to competitors late last year as UAW’s strike against GM shut down production. Buyers who had been willing to wait took delivery on trucks early this year, in most cases before the COVID-19 shelter-in-place orders.
For Q1, that surge in pickup sales generated a lot of high-margin transactions that made up for the steep losses in late February and all of March. April was bad for everyone, but GM officials said pickups were stronger than expected during the shutdown, and they’re hopeful for strong demand as people emerge from quarantine.
As with Ford and FCA, GM is expected tough numbers for Q2 because it produced no vehicles in April and only plans to start producing in small volumes on May 18. So, inventories for key vehicles (those high-margin trucks) are low in many parts of the country. Company officials said restarting production is critical, but they have taken the time to ensure that workers will be safe.
“These global, standardized measures were informed by learnings from GM facilities in China; Korea; Kokomo, Indiana; Arlington, Texas; Warren, Michigan; Customer Care & Aftersales operations, as well as collaboration with union leadership and supplier partners,” GM officials said. The company is making ventilators in Indiana and face masks and other personal protective equipment in Texas and Michigan. “These procedures meet or exceed CDC and WHO guidelines, and are designed to keep people safe when they arrive, while they work, and as they leave the facility.”
About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and Today's eMobility and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 20 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.