Higher costs at Cruise dragged down operating profit

General Motors has reported fourth quarter 2023 revenue of US$43bn (down 0.3% year on year, net income of $2.1bn (up 5.2%) and EBIT-adjusted of $1.8bn (down 53.8%).

According to Reuters, GM said the decrease reflected the impact of last autumn’s United Auto Workers’ strikes, higher costs at Cruise and a $1.1bn writedown related to EV battery cells held in stock.

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Full year 2023 revenue was $171.8bn (up 9.6%), net income $10.1bn (up 1.9%) and EBIT-adjusted $12.4bn (down 14.6%).

Full year 2024 guidance is net income of $9.8bn to $11.2bn and EBIT-adjusted of $12bn to $14bn.

“Consensus is growing that the U.S. economy, the job market and auto sales will continue to be resilient,” GM chief executive Mary Barra told investors in a letter cited by Reuters.

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Chief financial officer Paul Jacobson said in a call with reporters the automaker expected its electric vehicle operations would begin returning variable profit by the second half of 2024, the news agency reported.

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Separately, Reuters said, GM faces deepening challenges in China, once its largest market. Domestic Chinese automakers and Tesla are gaining share with electrified vehicles, fresh infotainment technology and aggressive price cutting. GM expects to post a loss for the current quarter, Jacobson told the news agency.

“We have a lot of inventory we are working through in first quarter” in China, he added.