Monday, August 19, 2019Canada's Leading Online Business Magazine

GM Posts $8.1 Billion Profit

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CBJ — General Motors posted an enormous $8.1 billion net profit for 2018, which is great for the Detroit-based automaker, but it certainly won’t make thousands of laid off employees throughout North America feel any better.

It’s a strong and somewhat unexpected rebound from the previous year when the company lost $3.9 billion on a giant tax accounting charge.

GM made $10.8 billion before taxes in North America, down about 9% from 2017. However, it does mean large profit-sharing cheques for about 46,500 union workers in the U.S. who are still employed.  It’s estimated they’ll get about $10,750 each, less than last year’s $11,500.

Chief Financial Officer Dhivya Suryadevara said GM said it made $2 billion on its joint venture in China last quarter, despite slowing auto sales in the country.

The Trump administration’s tariffs on imported aluminum and steel raised prices of those commodities, costing the company more than $1 billion last year. Suryadevara expects another $1 billion increase this year.

“It’s a volatile environment as you well know, and we’re going to have to see how that goes,” she said.

The company plans to eliminate about 6,000 factory worker jobs by closing three car assembly plants and two other factories.  The Oshawa plant will close this December, putting about 2,500 people out of work. It ends a decades-long presence for GM in the city. During peak production in the 1970s and 1980s, GM Oshawa employed about 40,000 people.

@CanBizJournal

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