General Motors' second-quarter net income fell 40 percent from a year ago as computer chip and parts shortages hobbled factory output and drove the company's U.S. sales down.
FILE - A General Motors sign is seen at its facility in Langhorne, Pa., on Oct. 16, 2019. General Motors' second-quarter net income fell 40% from a year ago as computer chip and parts shortages hobbled factory output and drove the company's U.S. sales down more than 15%. The Detroit automaker said it made $1.67 billion from April, 2022, through June, 2022, in part because it couldn't deliver 95,000 vehicles during the quarter because they were built without one part or another.
“Right now, we can't build enough full-size trucks and SUVs,” CEO Mary Barra told analysts Tuesday. “A lot of these vehicles, we have customers waiting for them.” But it's not certain that the year will go exactly as planned. Barra said there are economic concerns, so GM is taking steps to manage costs, including reducing discretionary spending and limiting hiring to critical positions needed to support growth. “We also have modeled many downturn scenarios and we are prepared to take deliberate action when and if necessary,” Barra said in a statement.
The company reported a $100 million equity income loss during the quarter from its joint venture in China, largely driven by pandemic-related lockdowns. But GM said production began to recover in June. More patience will be needed before GM shares, which are down over 40% this year, turn a corner, wrote CFRA Analyst Garrett Nelson.
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