GM Takes a Pandemic Beating

Steph Willems
by Steph Willems
gm takes a pandemic beating

General Motors’ second-quarter earnings report is out, and there’s red ink to report.

Hammered by the coronavirus-related shutdown of its domestic manufacturing facilities and a corresponding sales slide, the automaker reported an $800 million loss in Q2 — a far cry from the rosy, $2.42 billion profit it saw a year earlier.

GM’s cash burn was also a five-alarm affair, but one element of the report was hardly depressing at all: the company’s Chinese sales.

Thanks to the timing of the virus, which clobbered China in Q1, the second quarter of 2020 saw sales in that marker sink only 5.3 percent, year over year. In North America, however, GM’s volume dropped 35.5 percent.

Globally, revenue plunged 53 percent to $16.78 billion, with $8 billion erased from its cash pile as factories idled and workers stayed home. Those plants reopened in mid-May with new health protocol and various protective installations in place, though the return to work has been a rocky one. Absenteeism remains high. Still, GM’s automotive liquidity stood at $30.6 billion at the end of the quarter, so the company’s not begging for crusts of stale bread on a street corner somewhere.

All that said, GM made it through what everyone anticipated to be an awful quarter better than many expected. GM credits the continued popularity of high-margin pickups during the lockdown — a phenomenon all Detroit Three members sustained via big incentives and attractive financing offers. The push continues to rebuild depleted inventories.

“The company is working all avenues to increase U.S. dealer stocks and has restarted all U.S. full-size pickup truck and full-size SUV plants to three shifts, and nearly all other plants to pre-pandemic shift levels,” the company said in its report. “Through July 25, landed U.S. dealer stock has grown by 9 percent, and total vehicles in-transit was up 6 percent, since June.”

GM also tossed some kudos to the almost silent introduction of the tweener Chevrolet Trailblazer and Buick Encore GX crossovers, which landed at dealerships just as the country was attempting to pull out of the lockdown.

“They’ve gained retail market share every month since launch and combined, have captured more than 10 percent of the small SUV segment,” GM stated, citing J.D. Power data.

[Image: General Motors]

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  • Lorenzo Lorenzo on Jul 29, 2020

    I hope GM doesn't depend on Chinese sales. With torrential rains continuing to batter Chinese agriculture, 45 million people evacuated, a predicted drop in Chinese GDP, and food shortages forcing the Chinese government to import huge amounts of food with foreign reserves, GM may have trouble getting its profits out of China. BTW, famed British psychic Wilfred Wilton-Voorhees has predicted a large drop in the Chinese economy, accompanied by large scale civil unrest that forces the CCP to liberalize or face an overthrow by the large upper class that was marginalized by president for life Xi Jiyang, who may not survive the unrest. So there's that, if you believe psychics.

    • Peter Gazis Peter Gazis on Jul 29, 2020

      Lorenzo I believe in GM’s fullsized pickups, and those aren’t sold in China.

  • ToolGuy ToolGuy on Jul 29, 2020

    Hey, let's be positive: the Revenue glass is not 53 percent empty, it is 47 percent full.

  • Denis Jeep have other cars?!?
  • Darren Mertz In 2000, after reading the glowing reviews from c/d in 1998, I decided that was the car for me (yep, it took me 2 years to make up my mind). I found a 1999 with 24k on the clock at a local Volvo dealership. I think the salesman was more impressed with it than I was. It was everything I had hoped for. Comfortable, stylish, roomy, refined, efficient, flexible, ... I can't think of more superlatives right now but there are likely more. I had that car until just last year at this time. A red light runner t-boned me and my partner who was in the passenger seat. The cops estimate the other driver hit us at about 50 mph - on a city street. My partner wasn't visibly injured (when the seat air bag went off it shoved him out of the way of the intruding car) but his hip was rather tweaked. My car, though, was gone. I cried like a baby when they towed it away. I ruminated for months trying to decide how to replace it. Luckily, we had my 1998 SAAB 9000 as a spare car to use. I decided early on that there would be no new car considered. I loathe touch screens. I'm also not a fan of climate control. Months went by. I decided to keep looking for another B5 Passat. As the author wrote, the B5.5 just looked 'over done'. October this past year I found my Cinderella slipper - an early 2001. Same silver color. Same black leather interior. Same 1.8T engine. Same 5 speed manual transmission. I was happier than a pig in sh!t. But a little sad also. I had replaced my baby. But life goes on. I drive it every day to work which takes me over some rather twisty freeway ramps. I love the light snarel as I charge up some steep hills on my way home. So, I'm a dyed-in-the-wool Passat guy.
  • Paul Mezhir As awful as the styling was on these cars, they were beautifully assembled and extremely well finished for the day. The doors closed solidly, the ride was extremely quiet and the absence of squeaks and rattles was commendable. As for styling? Everything's beautiful in it's own way.....except for the VI's proportions were just odd: the passenger compartment and wheelbase seemed to be way too short, especially compared to the VI sedan. Even the short-lived Town Coupe had much better proportions. None of the fox-body Lincolns could compare to the beautiful proportions of the Mark was the epitome of long, low, sleek and elegant. The proportions were just about perfect from every angle.
  • ToolGuy Silhouetting yourself on a ridge like that is an excellent way to get yourself shot ( Skylining)."Don't you know there's a special military operation on?"
  • ToolGuy When Farley says “like the Millennium Falcon” he means "fully updatable" and "constantly improving" -- it's right there in the Car and Driver article (and makes perfect sense).