As General Motors gears up for the 2019 Chevrolet Silverado and 2019 GMC Sierra, the automaker’s profits suffered. GM’s production shutdown to retool for the upcoming full-size pickups made for 47,000 units of lost production. In turn, the changeover hampered profitability.
Bloomberg reported last Thursday that GM’s profit margin slipped to 8 percent in North America. It’s the automaker’s worst showing in nearly four years.
The promise of sustained or increased profits follows GM CEO Mary Barra’s pledge to continue delivering strong results. She began 2018 with lofty goals and said the slowing U.S. auto market would not hurt the automaker’s financial goals.
However, GM must also contend with increased prices on raw materials, such as steel. And, as fuel prices climb, it’s unclear how consumers will respond to SUV-centric lineups.
The report also said GM has a serious challenge in Ford on Wall Street. Investors perked up as the rival automaker announced major cost cuts through 2022 and said it would cull passenger cars from the U.S. market.
“It may be a case of buy Ford and sell GM,” said Morningstar Inc. analyst David Whiston. “I don’t think it’s deserved because the company is being set up to do quite well. The stock is still pretty cheap.”
GM CFO Chuck Stevens said the automaker expects its full earnings will largely reflect 2017, should no major surprises occur.