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Despite Autoworkers Strike, GM Rakes in $10B Profit Last Year, Plans Reintroduction of Plug-In Hybrids to US Market

General Motors endured a six-week autoworkers’ strike, resulting in plant closures and over $1 billion in losses. 

Despite this, the company saw a 12% increase in net income last year, reaching just over $10 billion, up from $8.9 billion in 2022. 

Additionally, it surpassed Wall Street expectations, with earnings per share hitting $7.68, excluding one-time items. 

Full-year revenue surged to $171.84 billion, approximately 10% higher than estimates. 

Anticipating a modest improvement in earnings this year, GM projects a net income range of $9.8 billion to $11.2 billion, with adjusted earnings per share expected to be between $8.50 and $9.50. 

This positive outlook is supported by strong performance in North America, where pretax profits amounted to $12.3 billion, resulting in profit-sharing checks of $12,250 for around 45,000 United Auto Workers members.

Despite preparations for a slight decline in vehicle selling prices due to increased discounts and growing inventory, GM remains optimistic about maintaining stable prices for both internal combustion and electric vehicles. 

The company aims to uphold a 50-to-60-day vehicle supply at U.S. dealerships to meet demand while limiting discounting. Challenges may arise as industry-wide inventory levels approach pre-pandemic levels. 

CEO Mary Barra revealed plans to reintroduce plug-in gas-electric hybrid models in the U.S., aiming to comply with stricter fuel economy standards starting in 2027 while leveraging existing hybrid technology produced in other markets. 

Barra reiterated GM’s commitment to eliminating tailpipe emissions from light-duty vehicles by 2035, emphasizing the interim benefits of deploying plug-in technology to reduce environmental impact.

Industry analysts have welcomed GM’s hybrid reintroduction, citing consumer preferences and infrastructure limitations as factors favoring hybrid adoption over electric vehicles. 

Hybrid sales growth outpaced electric vehicle sales in the U.S. last year, reflecting ongoing consumer concerns about range anxiety and charging infrastructure availability. 

Despite the resurgence of hybrids, GM remains dedicated to its electric vehicle strategy, with expectations of improved profitability and expanded market share. 

The company aims to sell 200,000 to 300,000 electric vehicles in North America this year, with plans to adjust production according to demand. 

Moreover, cost-cutting measures and streamlined operations are projected to yield significant savings, bolstering GM’s financial resilience and positioning it for sustained growth. 

GM anticipates reduced labor costs and enhanced profitability, buoyed by ongoing cost-saving initiatives and a strategic focus on high-demand segments. 

While uncertainties persist, GM remains agile in responding to market dynamics and consumer preferences, underpinned by a commitment to innovation and sustainability in its product offerings.

Source: images.wsj