GM quarterly profit slumps 35%, but it sticks by full year outlook that was lowered in May
GM CEO Mary Barra also said in a letter to shareholders on Tuesday that the automaker is attempting to 'greatly reduce our tariff exposure,' citing $4 billion of new investment in its U.S. assembly plants.
"In addition to our strong underlying operating performance, we are positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape," she said.
GM said that it's making solid progress in mitigating at least 30% of the $4 billion to $5 billion gross tariff impact it anticipates for the year through manufacturing adjustments, targeted cost initiatives and with pricing.
There was a $1.1 billion net impact from tariffs in the second quarter and GM anticipates a higher net impact in the third quarter because of indirect costs related to tariffs.
For the three months ended June 30, GM earned $1.89 billion, or $1.91 per share. A year earlier the company earned $2.93 billion, or $2.55 per share.
Stripping out certain items, earnings were $2.53 per share. That handily beat the $2.34 per share analysts polled by FactSet were calling for.
Revenue declined to $47.12 billion from $47.97 billion, but still topped Wall Street's estimate of $45.84 billion.
Shares declined more than 3% before the opening bell Tuesday.
EV sales totaled 46,300 in the second quarter, up from 31,900 in the first quarter. Yet overall in the U.S. EV sales growth has begun to slow. The $7,500 EV tax credit under the Inflation Reduction Act is set to expire in September for many models.
'Despite slower EV industry growth, we believe the long-term future is profitable electric vehicle production, and this continues to be our north star,' she wrote. 'As we adjust to changing demand, we will prioritize our customers, brands, and a flexible manufacturing footprint, and leverage our domestic battery investments and other profit-improvement plans.'
The company maintained its full-year financial forecast. In May General Motors lowered its profit expectations for the year as the carmaker braced for a potential impact from auto tariffs as high as $5 billion in 2025.
The Detroit automaker said at the time that it anticipated full-year adjusted earnings before interest and taxes in a range of $10 billion to $12.5 billion. The guidance includes a current tariff exposure of $4 billion to $5 billion.
A month later GM announced plans to invest $4 billion to shift some production from Mexico to U.S. manufacturing plants. The company said at the time that the investment would be made over the next two years and was for its gas and electric vehicles.
President Donald Trump signed executive orders in April to relax some of his 25% tariffs on automobiles and auto parts, a significant reversal as the import taxes threatened to hurt domestic manufacturers.
Automakers and independent analyses have indicated that the tariffs could raise prices, reduce sales and make U.S. production less competitive worldwide. Trump portrayed the changes as a bridge toward automakers moving more production into the United States.
The tariffs ordered by Trump are hitting the entire auto sector, which sends vehicles and parts across the northern and southern borders of the U.S. repeatedly as they are assembled. The Center for Automative Research says that a uniform 25% tariff on all trading partners would have an increased cost of $107.7 billion to all U.S. automakers and an increased cost of $41.9 billion for the Big Three automakers in Detroit, Stellantis, GM and Ford.
GM reported its financial results a day after Jeep maker Stellantis said that its preliminary estimates show a 2.3 billion euros ($2.68 billion) net loss in the first half of the year due to U.S. tariffs and some hefty charges. Stellantis will release its financial results for the first half of the year on July 29.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
BBC News
4 minutes ago
- BBC News
How Kentucky bourbon went from boom to bust
As American as apple pie, Kentucky bourbon was booming after the last Great Recession ended. But as the economy has waned post-Pandemic - and with multiple trade wars on the horizon - the market may be drying the whiskey, which is traditionally made with corn and aged in charred oak barrels, has roots going all the way back to the 18th century, it wasn't until 1964 that it became an iconic piece of Americana, when Congress passed a law declaring it a "distinctive product of the United States". But drinking trends come and go, and by the end of the 20th century, bourbon was considered a bit old fashioned - pun intended."You often see these kind of generational shifts where people don't want to drink what their parents drink," said Marten Lodewijks, the US president of IWSR, which collects alcoholic beverage data and provides industry analysis. Then, as the world recovered from the 2008 recession, drinkers seemed to rediscover this classic spirit, for a few different reasons. For starters, the price point was good, which made it attractive for bar managers to purchase and incorporate into cocktails and for younger drinkers to sample. Then, in 2013, a law was passed in Kentucky that made it easier for companies to purchase and resell vintage bottles, opening up a high-end collectible market. Add to that the rise in mid-century nostalgia fuelled by shows like Mad Men, and bourbon was due for a full-blown of bourbon grew by 7% worldwide between 2011-2020, which is more than three times the growth of the decade prior, according to industry data company some bourbon distillers were becoming quasi-celebrities, and people were starting to buy up bourbon bottles not to drink, but as an investment. "Everyone was going crazy over the bourbon market, and treating like a commodity, like a stock," recalls Robin Wynne, a general manager and beverage director for Little Sister in Toronto, Canada, who has been a bar manager for about 25 years."People would go in as a prospector, to flip bottles for two to three times the value." But like most market bubbles, this one was bound to burst. The pandemic's lockdowns tanked bar sales, and inflation has made many would-be bourbon drinkers choose less expensive options - or forgo drinking all together. Amongst Gen-Z, many 20-somethings are drinking less than their older siblings and parents did at their factors have contributed to declining alcohol sales, with bourbon sales specifically slowing down to just 2% between 2021-2024, according to ISWR data. President Donald Trump's global tariffs have been the final straw. The EU has announced retaliatory tariffs against US goods, including Kentucky bourbon and Californian wine, although implementation has been delayed for six most provinces in Canada have stopped importing American alcoholic beverages in retaliation. The country accounts for about 10% of Kentucky's $9bn (£6.7bn) whiskey and bourbon business. "That's worse than a tariff, because it's literally taking your sales away, completely removing our products from the shelves ... that's a very disproportionate response," Lawson Whiting, the CEO of Brown-Forman, which produces Jack Daniels, Woodford Reserve and Old Forester, said back in March when Canadian provinces announced their plan to stop buying US has said that tariffs will boost made-in-American Republican Senator Rand Paul, who represents Kentucky, said the tariffs will hurt local businesses and consumers in his home state."Well, tariffs are taxes, and when you put a tax on a business, it's always passed through as a cost. So, there will be higher prices," he told ABC's "This Week" in May. These economic pressures have created a growing list of casualties. Liquor giant Diageo, reported that sales of Bulleit, a Kentucky distillery that makes bourbon, rye and whiskey, where down 7.3% this fiscal Turkey - a Kentucky bourbon owned by Campari - sales were down 8.1% over the past six big, international brands will likely be able to weather the storm, the sales hit has led to a growing list of casualties. In July, LMD Holdings filed for Chapter 11 bankruptcy - just one month after opening the Luca Mariano Distillery in Danville, spring, Garrard County Distilling went into in January, Jack Daniel's parent company closed a barrel-making plant in Kentucky. The bottom of the barrel has not yet been reached, warned Mr Lodewijks."I'd be extraordinarily surprised if there weren't more bankruptcies and more consolidation," he part, bourbon has become a victim of its own success - the rise in bourbon sales, and the growth of the premium market, helped fuel many small distilleries. Because bourbon must age in barrels for years, what's on the market today was predicted a few years ago, which means that there is currently an oversupply, which is driving down while these economic conditions are harsh, Mr Lodewijks said that history has shown how tough times can create innovation. Scotch whiskey used to be fairly simple, a blend of middle-of-the road tipples. But when sales declined in the second part of the 20th centuries, distillers started aging their excess bottles, which helped create the market we have now for premium, aged Scotch Canada, where bourbon imports have slowed to a trickle, local distilleries have started experimenting with bourbon-making methods to give Canadian whiskey a similar taste."The tariff war has really done a positive for the Canadian spirits business," noted Mr Wynne."We've got lots of grains to make these whiskeys without having to rely on the States."
Auto Blog
33 minutes ago
- Auto Blog
I Drove the 2025 Ford Maverick XLT AWD Hybrid. Here's My Brutally Honest Review
A gateway drug into the world of trucks When the 2025 Ford Maverick was parked on my driveway to be reviewed, my three-year-old daughter—who's just as obsessed with cars as I am—said, 'Look at the baby truck, Mama! I love it!' I'm not sure Ford designed the Maverick to be cute or endearing, but it definitely was. And because it's cute and dainty, its capabilities are often underestimated. My husband used it to get his tools home from the repair shop he worked at, and immediately appreciated the cubby holes under the rear seats, the floor space, and, of course, the bed. Source: Kristen Brown Trucks are borderline luxury cars these days, so I expected the Maverick to be closer to $45,000 MSRP. The model I reviewed was the XLT trim, which is the second from the base, so the MSRP is $30,645. Mine had the XLT luxury package, the optional Cosmic Blue paint, all-wheel drive, and the hybrid powertrain, pushing the suggested retail price to $36,645. The top-shelf model, the Tremor, starts at $40,995, which is still a great value for an off-road-focused trim with 4WD instead of AWD. After putting my kids in it, taking it to a friend's BBQ, filling it with gear and toys, and daily driving it, I realized it's a lot tougher than most people—including myself—would ever assume. It won't replace a full-sized truck, but it's not meant to When I went with my husband to fill 'er up with tools after he quit his job as a master technician, the Maverick immediately drew a crowd. His coworkers swarmed to comment on how 'cute' the Maverick was, poke fun at the towing rating (2,000 lbs, as it wasn't configured with the $745 4K Tow Package that increases it to 4,000 lbs), how small the bed was, how low it was to the ground, and how petite it was. As he lifted the rear seats and began filling the storage sections underneath them with tools, their remarks slowed. Once he was able to fill the foot wells with bags full of other items, they stopped completely. Source: Kristen Brown He especially appreciated the low entry point into the bed because he was able to put bigger items, like his bumper holder, smaller tool box, and tool bags full of items in it without straining to get heavier things over the side of the truck. This, he said, made him less anxious about denting it, and lowering the tailgate made it even easier. Before he knew it, he was able to fit everything that wasn't in his large toolbox in the bed and rear seats. There's no way all those items would have been able to fit in my Subaru Forester. When it was time to go to a BBQ at his coworker's house, fitting our daughters, their bikes, extra clothes, blankets, and other items was easy. Fitting a box of diapers, a pack of toilet paper, and paper towels from Costco was even easier, and it didn't take up a single centimeter of space for me or the girls. The Maverick is truly in a league of its own, as it's not quite a car or SUV, but it's not a 'real' truck, either. It's in the middle of it all. Installing my toddlers' seats was a tad tricky Like most small trucks I've reviewed, installing the top tether involved folding the top of the seat. Attaching it and adjusting one seat wasn't too bad, but it started to get tricky with two front-facing toddlers. Once they were both adjusted, it was fine, but I realized that both seats being tightened would mean removal would be… Annoying, at best. And I was right. I had to cram my hand behind the back of the seat to loosen one seat to be able to loosen the other one. Source: Kristen Brown Granted, most people aren't moving their car seats from car to car every week like I am—so it won't be as big of deal for those who are looking to the Maverick as a daily driver—but if you're planning on making it a secondary car that you'd occasionally move seats into, keep that in mind. It was much easier in the Ranger, but not as difficult as the Honda Ridgeline. The interior design and layout were fresh, funky, and comfortable Both my husband and I immediately noticed that the speckled gray and electric blue plastic was used to break up the interior's primary dark grey color. Almost simultaneously, we said it reminded us of the old-school camping coolers our parents used growing up. I'm not sure that Ford intended that, but it did inspire a sense of nostalgia for both of us. The driver and passenger seats were some of the most comfortable in any new car I've reviewed, with all the cushioning in the right places. The dash isn't too high, making it easy to see over the hood and pinpoint the corners, so it was easy to see out of, too. Long-distance trips would be easy, breezy, and beautiful. Source: Kristen Brown Since the Maverick's design prioritizes the bed, the rear seats aren't as spacious as the front seats, but there was plenty of space for my toddler's car seats. Older kids would have enough space to enjoy looking out of the reasonably sized windows, but adults might find themselves needing to sit askew to be comfortable for long drives (unless, of course, either the driver or passenger was fine with having their knees up against the dashboard). Mileage, unsurprisingly, was excellent The Maverick XLT can be configured with either the 2.5-liter full-hybrid setup that produces 191 horsepower and 155 lb-ft of torque or the 2.0-liter four-cylinder EcoBoost engine. That engine makes 250 horsepower and 280 lb-ft of torque, so it's more powerful, but it's not a hybrid. The mileage as a hybrid was jaw-dropping. Around town, I was averaging over 28 mpg. When we drove to Prineville for the barbecue, I averaged 38.7 mpg. After my week with it, the average for all 180 miles I drove it was almost 39 mpg. And that was with it typically being full of people. Source: Kristen Brown The AWD setup paired with the electric battery made the Maverick feel like there was more power to the pedal than there was, especially with the CVT. Starting from a stop was plenty quick, and getting up to speed on the highway wasn't difficult. Trust me when I say this, it's no racehorse—but it'll get you from 0 to 60 in a very reasonable time. The standard equipment was pretty impressive One of the first things my husband noticed about the Maverick's FLEXBED was the adjustable rails on either side of the bed. This way, if you needed to adjust tie downs in a specific way to keep anything from falling out, it was very easy to do. Those tie downs were everywhere you'd expect them to be, including on the tailgate itself, so you could tie down larger items with the gate down, like a couch or a dirtbike, with ease. On either side, there were 12V connectors, allowing you to power various tools with it or tap into it to use it as needed. There were locking storage containers on both sides of the bed, too, so you could lock up tools or camping supplies–but there was a posted weight limit of 20 lbs. Source: Kristen Brown The XLT had a 13.2-inch LCD touchscreen with wireless Android Auto and Apple CarPlay, which worked seamlessly once I connected my phone's Bluetooth. I was prompted to download the Ford app, and from there, I could do remote start, prepare the cabin's temperature, lock and unlock it, and more. The sound system wasn't anything to write home about, and there isn't an option for a better one for the XLT, but it's not horrible. It has enough bass to keep things interesting, but it's not as good as the Bang & Olufsen sound system in the Explorer. Ford has a very, very long list of add-ons to choose from Looking at the webpage for the Maverick XLT was almost daunting. My thumb nearly felt sore from how many times I scrolled down before reaching the bottom of just the exterior add-ons. From Ford, you can have a bed cover added on, there are a few toolboxes to choose from, and there are Yakima bed rail-mounted crossbars. There's also a bed extender, a bed divider kit, and splash guards. The one I drove didn't have a power moonroof, but one can be added for $995; sun blinds are an option, as well as exterior lightning and a speaker from Overland, or matte black speed stripes on the hood and roof. Source: Kristen Brown What's even crazier is the fact that the top-of-the-line model, the Tremor, comes with an even longer list of standard equipment, but an equally long list of possible add-ons. You could easily configure it to be well over $50,000, but it's also incredibly easy to make it a very loaded little truck for under $45,000, even with add-ons. Final thoughts The Maverick is growing in popularity, particularly in my hometown of Bend, Oregon, because it's much tougher than it looks. I've seen people use them as company cars, moving HVAC or pool cleaning equipment, to light-duty construction cars, and I've seen a few of them being used as local government vehicles. My neighbor has one, and he uses it to move plants and garden material back and forth, as his wife grows and sells flowers at our local farmer's market. I've seen a few being used purely as family vehicles to move their toddlers and their associated items around town, too. All-wheel drive, a potent hybrid powertrain, plenty of space and comfort, and a reasonably sized bed make the Maverick more than just a Baby Truck. It makes it versatile for a wider range of buyers, and the price range makes it even more possible to buy one. About the Author Kristen Brown View Profile
Daily Mail
34 minutes ago
- Daily Mail
Latest sign Las Vegas is dying
Las Vegas has shown yet another worrying sign that it's on the decline as soaring prices and tourist boycotts have driven visitors away. Tipping in Las Vegas has plunged by as much as 50 percent, according to Fox News. Workers are blaming a sharp drop in visitors, which they say has left them with fewer customers and lower pay. 'No tax on tips, that's a rad thing,' Charlie Mungo, 36, a tattoo artist in downtown Las Vegas, told the Wall Street Journal of President Trump's new policy. 'But it doesn't really do us much good if there isn't any people to get tips from.' Mungo said he now makes about $1,500 a month and has lost nearly a third of his clients after Canadian tourists, who used to represent 30 percent of his business, stopped coming. Many blame the economy, rising costs, and even political boycotts of the city. Some service workers are pointing fingers at Donald Trump, saying his presidency has led to a drop in international visitors, while others say the real problem is Vegas itself. 'We're all starting to freak out,' Mungo said. Jacob Soto, 22, a supervisor at Pinkbox Doughnuts in downtown Vegas, told the Wall Street Journal that his credit card tips have shrunk from $200 a week to $100–$150. 'I kinda rely on tips at the end of the day,' he said. On Reddit's r/VegasLocals forum, one cocktail waitress said she used to average about '80 cents a drink.' 'Now I'm averaging about 10 cents,' the waitress wrote. Another server added: 'We are working triple what we used to and making a quarter of what we did.' According to the Las Vegas Convention and Visitors Authority, overall visits to Sin City are down more than 6 percent this year. Las Vegas welcomed 3.39 million visitors in March, down almost eight percent from 3.68 million in February. April saw just over 3.3 million visitors, a drop of 5.1 percent from last year.
