DETROIT (NewsNation Now) — About 44,000 members of the United Auto Workers union will be getting $9,000 checks as a part of a profit-sharing agreement after General Motors brought in $9 billion in revenue in North America.
The Detroit automaker said Wednesday it made $6.43 billion as demand for its vehicles surged late in a year dominated by coronavirus upheaval. In the fourth quarter, the company made $2.85 billion.
General Motors’ profit fell 4.5% in 2020, but a strong second half more than offset the effects of pandemic-related factory closures and a costly air bag recall.
After GM’s North American factories reopened in May, the company ran many of them flat-out but couldn’t make up all the lost production. As customers returned to buying again, inventory was short and GM’s U.S. sales for the year fell 12% from 2019. But because buyers bought more expensive trucks and SUVs and loaded them with options, the company was able to turn a big profit.
Even with the strong performance, GM shares fell 4.4% in midday trading, largely because of cautious company guidance about a semiconductor chip shortage that’s affecting the whole auto industry. GM predicted the shortage will cost it $1.5 billion to $2 billion in earnings before taxes this year due to lost production. Still, GM expects pretax income for the year of $10 billion to $11 billion, or $4.50 to $5.25 per share.
The shortage has forced GM to cancel shifts at several factories, but CEO Mary Barra said it won’t affect GM’s most profitable vehicles that are in high demand. She expects the chip shortage, which is hitting the entire auto industry, to be resolved this year, but it was too early to predict precisely. “We’re doing everything possible,” Barra said. “We won’t lose any production throughout the year as it relates to full-size trucks and SUVs.”
On Wednesday, the company also released more details about its aggressive push into electric vehicles.
GM already has pledged to spend $27 billion developing 30 new global electric vehicles and on autonomous vehicle research by 2025, with two-thirds of the EVs coming to the U.S. The plans to spend more than $7 billion on electric and self-driving vehicles in 2021 alone. Of that, $6 billion would go to electric vehicles and $1 billion would go to autonomous, Chief Financial Officer Paul Jacobson said.
Barra wouldn’t give a specific time frame for its Cruise autonomous vehicle unit to start a ride-hailing service without human backup drivers. But she said it’s not “years away” like many people think. The company is now testing vehicles without human backups in San Francisco.