General Motors just took us on a financial joyride that had twists, turns, and a big pothole at the end. The automaker’s Q4 results are the definition of a mixed bag—think champagne on one side and a blown tire on the other.
On the sunny side of the street, GM pulled in a jaw-dropping $47.7 billion in revenue, easily cruising past Wall Street’s expectations.
Adjusted earnings per share? A solid $1.92, showing that this Detroit giant can still pack a punch when it comes to its core business. But just when the crowd started cheering, the wheels came off.
GM reported a staggering net loss of $3 billion, thanks to some costly missteps. First, let’s talk about their misadventures in China. The company’s joint venture in the world’s largest auto market ended up being a major financial sinkhole.
With increasing competition from local electric vehicle (EV) giants like BYD and Nio, GM found itself struggling to stay in the fast lane. Add to that China’s slowing economy, and it’s clear this venture wasn’t exactly a smooth ride.
Then came the Cruise crash—figuratively, of course. Remember GM’s much-hyped robotaxi program, Cruise?
It was supposed to be their ticket to self-driving dominance, a way to park themselves in the future of urban mobility. Instead, it’s turned into a financial wreck.
The decision to shut down Cruise operations came after mounting regulatory and technical hurdles, not to mention the public relations messes caused by a series of real-life accidents involving their autonomous vehicles.
The cherry on top? The program’s shutdown contributed significantly to that massive one-time charge, pushing GM into the red for the quarter.
But don’t count GM out just yet. Beneath the drama, their North American operations remain strong, buoyed by steady demand for their Silverado and Sierra trucks and their electric lineup, which includes the Hummer EV and the Chevrolet Bolt. Their pivot toward EVs has been slow but deliberate, and with Ford and Tesla battling it out in the EV arena, GM’s calculated approach could pay off in the long run.
CEO Mary Barra and her team have their work cut out for them. They’ll need to figure out how to bounce back in China while doubling down on their EV strategy. There’s also the question of whether they can recapture the innovation edge they’ve lost in the self-driving race.
Investors seem to be in a cautious mood, watching closely to see if GM can steer itself out of this $3 billion ditch. The company has a long road ahead, but with a history of defying the odds, don’t be surprised if they manage to pull off another comeback.
In the words of GM’s iconic slogan: “Find new roads.” Let’s hope those roads lead to smoother financial terrain.
