General Motors Corp. Chair and CEO Mary Barra has reiterated the car giant’s 2022 goal of growing vehicle production by 25% to 30% despite ongoing supply chain problems and inflationary pressures.
A key to Barra’s optimism is an improvement in the availability of semiconductors, which she and CFO Paul Jacobson told analysts and investors is becoming more reliable and should continue to improve through the second half. On top of that, Barra lauded GM teams’ work to find alternative sources for various other parts and tackle other supply chain the company is facing “on a weekly or almost daily basis.”
GM posted a net profit of $2.9 billion in the first three months of this year, a drop of 3% from the prior-year period. Revenues rose nearly 10% to almost $36 billion even though total vehicle sales fell to 1.4 million from more than 1.7 million in early 2021 while adjusted earnings before interest and taxes slipped 8% to $4.0 billion.
Barra said GM has now taken 140,000 reservations for the Chevrolet Silverado EV, including from 400 fleet customers, up from about 240 three months ago. She also pointed to a number of other upcoming EV launches, including the GMC Hummer SUV, and said the company is “regaining momentum” with the Chevrolet Bolt, which has faced a long production halt over battery fires, with plans to build 50,000 units this year.
On the inflation front, Jacobson said GM will this year spend about $2.5 billion more than previously forecast on logistics and commodities. But he didn’t adjust his team’s forecast for adjusted EBIT for the full year, saying the company can lift prices and trim costs. Part of the latter initiatives, he added, will come from holding off some planned investments in future growth—a pool of money he and Barra have in the past said they will be flexible about allocating.
“We are making the right long-term strategic decisions for the business,” Jacobson said in prepared remarks on a conference call.
Shares of GM (Ticker: GM) rose more than 1% to $38.59 after hours April 26, regaining some of the more than 4% they lost during a regular session that saw the major indices all lose more than 2%. Year to date, they have lost more than 35% of their value.
