"We entered this crisis better positioned financially because of the many business transformation actions we have taken over the past several years to improve our competitiveness," CEO Mother Mary Barra told investors on a conference call.
"We entered this crisis better positioned financially because of the many business transformation actions we have taken over the past several years to improve our competitiveness," CEO Mother Mary Barra told investors on a conference call.
So very true. Kudos to Mary Barra and other GM executives for being proactive with those business transformation actions long before the COVID-19 induced recession started.
A few things to consinder
1. GM first quater was affected by the ill advised UAW strike
2. GM was in transition to replace the highly profitable SUV's when this all went down a traditional time for lower sales
3. China was in the full Covid lockdown for most of Q1
However you slice it, it seems Mother Maria Barrah has put GM in a good position to grow organically with a strong balance sheet without hurting from loss making profits.
If they can pull off EV and Self driving technology, this is an undervalued company.
1) If anything, the strike helped Q1, because they entered the year light, and they were still catching up running additional production. (GMNA was +$300 million in 2020 over 2019)
2) The strike pushed the K2XX/T1XX changeover to the end of March, making Q1 "clean" further helping Q1 profits (no changeover down time)
3) True, but China adds little to the bottom-line, but was a drag $700,000 loss in Q1, so this one is mostly valid.
(2019 was $0.00, 2020 was -$600 million)
Impressive! Though as we compare to the competition, keep in mind that if companies have "dirty closets" they will clean up their balance sheets, meaning dumping expenses to the P&L as everyone is expecting results to be bad. Seems like GM is running a tight financial ship and don't have any dirty secrets on their balance sheet to drop. Good job Mary B!
Good thing all the "Run away Mary" armchair quarterbacks weren't in charge. Eagerly awaiting their apologies, or maybe they should just write GM directly.
A few things to consinder
1. GM first quater was affected by the ill advised UAW strike
2. GM was in transition to replace the highly profitable SUV's when this all went down a traditional time for lower sales
3. China was in the full Covid lockdown for most of Q1
However you slice it, it seems Mother Maria Barrah has put GM in a good position to grow organically with a strong balance sheet without hurting from loss making profits.
If they can pull off EV and Self driving technlogly, this is an undervalued company.
It'll be interesting to see what happens to Tesla.
They make most of their money off other automakers buying emission credits.
If everyone's way down, they get the double whammy. They're not building and no one's buying credits.
Maybe that's why we're seeing Elon's interesting tweets lately.
He sees disaster on the horizon and coming fast if things don't open up soon. They were capable of losing a billion in a good quarter.
Apparently some on Wall Street think GM is executing well given the current situation.
Interesting contrast between GM and Ford between this financial crisis vs. the 2008 meltdown. Ford was much better positioned going into 2008 to weather the storm and obviously GM wasn't, now the roles are reversed. However, this downturn could be so bad that it wont matter that GM is better positioned going into it, this one could be so bad that both GM and Ford go under....
OK, January 1 inventory numbers were a little low with fast moving products at around 45-60 days
but my sources tell me that GM hit it's stride in Q1 building out inventory to about 70 days by April 1.
So my take is that GM did both, booked a rich inventory build but also saw strong retail sales to dealers.
The counter to that is a lot more people are going to be work from home. A lot of companies are seeing first hand you can still get the work done without the overhead of a brick and mortar office location. That has the potential to drop commuting miles quite a bit and thus vehicle wear and tear and need for replacement.
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