General Motors Co. released newly positive third-quarter earnings after a net loss in the second quarter of $800 million. On November 5, the automaker said it had made $4 billion income out of $35.5 billion in net revenue compared to $2.35 billion a year earlier.
In a separate November 5 announcement, CEO Mary Barra said the company would invest 1 billion Canadian dollars ($760.6 million USD) in its Oshawa, Ontario plant. The announcement followed a tentative agreement between GM and Unifor, a Canadian union that represents hourly workers.
The company’s adjusted auto operating cash flow for the quarter was $9.1 billion, and its earnings margin before interest and tax was 14.9%. According to the company, automotive liquidity of $37.8 billion was above target, and the company says it expects to repay its revolving credit balance by the end of the year.
The positive earnings were driven by internal cost-saving austerity measures as well as by faster-than-expected rising sales in the U.S. and China, a pattern also noted by fellow automakers Ford Motor Co. and FCA.
Despite an overall 10% drop in sales over the course of the quarter, U.S. sales improved sequentially each month for the quarter with strong demand for crossovers, full-size pickups, and large SUVs. GM’s gains in China saw sales grow 12% there on a year-over-year basis. The Wuling Hong Guang Mini electric vehicle became the best-selling electric vehicle in China, and sales of Buick and Cadillac cars rose 26% and 28%, respectively.
CEO Mary Barra said the company’s performance for the year and the quarter was “a testament to GM’s resilience.”
“We entered the pandemic in a strong position and acted decisively to keep our teams safe, conserve cash and preserve liquidity, all while keeping our critical product programs on track,” she said, adding that the company is now “well positioned” to meet rising consumer demand.
Meanwhile in Canada, General Motors says the new Canadian investments would result in the hiring of between 1,400 to 1,700 new workers in its Oshawa Assembly plant. GM plans to use the money to build a new body shop and flexible assembly module to return pickup assembly to the plant. According to GM Canada President Scott Bell, pickups make up “GM’s largest and most important market segment in Canada.”
