GM Q3 2018 Earnings Absorbed ‘$400 Million Headwind’ Of Tariffs

General Motors has been and will continue to demonstrate emphasis in China, no matter how averse the market conditions will get. Despite challenges including steep sales declines and tariffs. The automaker has contested with the Trump Administration over tariffs, which are beginning to pile up on the balance sheet.

In Q3 2018 alone, General Motors absorbed $400 million due to commodities tariffs, according to Dhivya Suryadevara, General Motors CFO, during an interview with CNBC about the GM Q3 2018 earnings report released Wednesday morning. She went on to say that the company expects to deal with a total of over $1 billion in tariffs, largely due to the escalating trade battles between China and the United States. Suryadevara continued to say that the company had to “offset that (cost) and strengthen other areas of the business” as a result of the commodities tariffs.

That said, General Motors averaged 10.2 percent profit margins – which is a robust figure that any full line automaker would be proud of. Suryadevara also made note that General Motors has seen “no negative reception” towards the rise in average transaction prices on its vehicles. However, independent analysts outside of General Motors have outlined that consumers are holding onto vehicles longer as vehicle pricing continues to escalate.

On Wednesday, the GM Q3 2018 earnings report headlined $2.5 billion in income on $35.8 billion in revenue. On the same day, General Motors employees received an email outlining voluntary buyouts to roughly 18,000 salaried employees in North America who have 12 years or more experience. The buyout applies to any salaried employee who began their employment at GM began Dec. 31, 2006 or sooner. Eligible employees only have until Nov. 19 to volunteer for a buyout, or face the risk of a layoff beyond that date.