Detroit, Michigan – Overall auto sales may still be down for the year, but the people who are still shopping are buying trucks, crossovers, and higher-value luxury vehicles, trends that pushed General Motors’ Q3 earnings up 75% to $4 billion.
“This year, and the third quarter, is a testament to GM’s resilience. We entered the pandemic in a strong position and acted decisively to keep our teams safe, conserve cash, and preserve liquidity, all while keeping our critical product programs on track,” Chairman and CEO Mary Barra said. “Now we are well positioned to meet rising customer demand, accelerate our transformation and deliver our vision of a world with zero crashes, zero emissions and zero congestion.”
Throughout the COVID-19 pandemic, GM has continued to invest in future vehicles, announcing more than $6 billion in investments this year in electric vehicles (EVs) and batteries. The strong cash position provided by the economic recovery is allowing the automaker to repay emergency loans it took out in March to prepare for the pandemic downturn while continuing to invest in future products.
North America was responsible for nearly all of the positive financial news for GM. Profits here were $4.4 billion, and the GM Financial division that finances many of the vehicles sold in North America provided another $1.2 billion in pre-tax profits. International results were basically flat while the company continues to lose money on its Cruise autonomous driving division, a company that lost $200 million during the quarter while it develops new technologies but generates no revenue.
The company paid about $327 million in interest, much higher than in 2019 because of the COVID-19 funds it borrowed earlier this year. And, higher profits equal higher taxes – just shy of $900 million, more than triple the 2019 figure.
United Auto Workers Vice President and Director of the GM Department Terry Dittes praised the automaker for its management during the pandemic. Profit sharing agreements with workers are a strong part of the UAW contract, so workers have a strongly vested interest in the automaker’s success.
“In a challenging year, UAW members during this time of national crisis have pulled together to safely and productively make some of the finest quality vehicles and trucks in the world,” Dittes said. “This profit statement reflects our UAW members’ commitment to safety as they returned to the plant this spring, and their dedication to the quality and craftsmanship that is second to none.”