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2024-09-08 Update From: AutoBeta autobeta NAV: AutoBeta > News >
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AutoBeta(AutoBeta.net)02/06 Report--
On Feb. 5, GM released its 2019 results, which showed that GM's net income in 2019 was $137.2 billion, down 6.7% from a year earlier; net profit was $6.7 billion, down 17.4% from a year earlier; after taking into account the $3.6 billion loss caused by the strike, adjusted profit before interest and tax was $8.4 billion, down 28.8% from a year earlier. Of this total, net income in the fourth quarter was $30.8 billion, down 19.7% from a year earlier, and profits fell by $3.6 billion.
GM's net profit fell 17.4% from last year, mainly because of a 40-day strike against GM by the United Auto Workers (UAW).
September 2019. Nearly 50,000 workers across the United States went on strike because GM could not reach an agreement with workers on labor contracts and other issues. General Motors is trying to cut costs ahead of the expected recession in the U. S. auto industry, with plans to close two parts plants and two vehicle plants this year and cut costs. While unions demanded higher pay, more job security and better benefits, the strike brought GM plants in the United States to a standstill.
The 40-day strike cost GM $3.6 billion in 2019, and after factoring in strike losses, GM's adjusted profit before interest and tax fell 28.8 per cent from a year earlier to $8.4 billion. In addition, the strike also affected GM's adjusted free cash flow, which fell sharply by $5.4 billion to $1.1 billion in 2019. GM says its auto business will generate between $6 billion and $7.5 billion in revenue in 2020.
In addition to GM's losses caused by the strike, falling short of sales expectations is also one of the main reasons for GM's losses. Of these, more than 3.09 million vehicles were sold in the Chinese market, down 15 per cent from 3.64 million in 2018.
In GM's brand camp, only Cadillac has achieved sales growth, while other brands have declined to varying degrees. Specifically, Cadillac grew 3.9 per cent year-on-year to 213717, Buick 16.7 per cent to 850007, Chevrolet 20.1 per cent to 418000, Baojun 27.6 per cent to 608269 and Wuling 5 per cent to 1003611.
In response to the sales difficulties, there are media reports that GM will abandon its plan to carry "three-cylinder engines" and save its declining sales in the Chinese market by restarting key models with four-cylinder engines. Previously, some Buick and Chevrolet models offered only three-cylinder engines, a move that proved hugely unpopular with consumers and led to a decline in sales.
In addition, GM is speeding up the electrification process. GM announced that it will invest $2.2 billion in the production of several brands of all-electric trucks and SUV models, including the new GMC Hummer. In addition, at the end of 2019, GM formed a joint venture with LG to create a battery factory.
With regard to the outlook for 2020, Qian Huikang, GM's global executive vice president and president of GM China, said that GM is focusing on strengthening its product lineup and improving cost efficiency, and the market downturn is expected to continue in 2020. China's business will also face continued headwinds.
GM expects 2020 earnings to be the same as 2019, and 2020 adjusted earnings per share to be roughly the same as 2019. GM expects between $5.75 and $6.25 a share, while the average analyst estimate is $6.24, slightly higher than market expectations.
Last year, China's automobile market was sluggish, and annual production and sales declined to varying degrees. The China Automobile Association predicts that due to economic weakness and trade frictions with the United States, China's auto market will decline by 2%, 3% in 2020, the third consecutive year of decline since 2018. GM's performance in the Chinese market in 2019 is somewhat unsatisfactory, but it remains to be seen whether it will pick up in 2020.
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