New York (AFP) – General Motors faced questions Tuesday about the impact of potential moves by the Trump administration targeting trade and the environment, with the uncertainty overshadowing the company’s latest results. The big US automaker reported a quarterly loss due to costs from restructuring a China initiative, though that was offset by a 2025 earnings forecast that topped analyst expectations. However, its projections did not try to quantify the effects of new tariffs that Trump has threatened on key markets in which GM operates, such as Mexico, or the White House’s planned rollback of policies promoting electric vehicles.
Acknowledging the “uncertainty,” Chief Executive Mary Barra said the company had been “proactive” in engaging the Trump administration and Congress. “We have stressed the importance of a strong manufacturing sector and American leadership in advanced technologies,” Barra said in a letter to shareholders. “It’s clear that we share a lot of common ground, and we appreciate the dialogue.” Barra pledged to be “agile” in responding to any shifts. GM shares tumbled around 10 percent shortly after midday. Shares rose nearly 50 percent in 2024. In the fourth quarter, GM reported a loss of $3.0 billion compared with profits of $2.1 billion a year ago. Revenues rose 11 percent to $47.7 billion. The company projected 2025 earnings of between $11 and $12 per share, above analyst expectations.
GM garnered higher auto sales in the fourth quarter led by its home market, where pricing remained strong. But the earnings were dented by $4 billion in non-cash costs from revamping the SAIC General Motors Corporation. The company had signaled the hit in early December as it sought to bring down costs and clear out inventory in China.
GM’s 2025 outlook includes the full-year availability of sport utility vehicles revamped in 2024, as well as new EVs under the Cadillac brand set to launch. But executives faced multiple questions about how the fast-changing policy landscape affects its outlook. Barra said the company has been studying “multiple scenarios” on tariffs. Trump has threatened punishing 25 percent duties on all goods from Canada and Mexico, and 10 percent on goods from China, starting February 1. GM builds trucks in both Canada and Mexico, but “we have the capacity in the United States to shift some of that,” she said. The company is “encouraged” that Mexico’s leader, Claudia Sheinbaum, has indicated that they are working to avoid tariffs, she said. “But we’re doing the planning…and have several levers we can pull.”
GM also faced questions over EVs, which have emerged as a punching bag of the new White House. GM officials are targeting production of 300,000 EVs in 2025. One of Trump’s executive orders last week pledged to undo policies that disadvantage gasoline-powered cars and opened the door to removing tax credits for EV purchases and to a fight over California’s strict climate policies. “There’s a lot of moving parts out there,” said Chief Financial Officer Paul Jacobson, who described GM as having “multiple playbooks” to respond. “The reason that we guided to the status quo is because there are really infinite permutations on policy,” Jacobson said. “But rest assured …we’ve got plans in place, and we’re continuing to work proactively with the administration and with Congress on what we think are the right things to do, which is preserve American jobs and preserve American innovation.”
© 2024 AFP
