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- GM’s net profit fell from 6.6% to $2.7 billion.
- GM reported first quarter stock revenues from China at $45 million in profits compared to a loss of $106 million last year.
- A $300 million foreign exchange headwind from the weakness of the Mexican peso also affected Detroit’s automakers.
General Motors executives said Tuesday that tariff concerns had a slight impact in the first quarter as profits fell 6.6%, but President Donald Trump’s continued uncertainty regarding import taxes will lead GM to revise its full-year guidance.
The Detroit automaker said that despite rising US sales and profits in China, the production hurdles that come with North American full-size pickups and SUVs and other headwinds are hurdles for the period ending March 31.
GM is the first of Detroit 3 to report revenue for the first quarter of 2025. Chief Financial Officer Paul Jacobson called for GM to not comment on the costs arising from the tariffs as GM only affected it for a few days.
Trump has signed an executive order to implement 25% tariffs on foreign vehicles starting April 3. This used several important auto parts that will be subject to customs duties starting May 3rd. Just a week later, he paused most of them for 90 days.
Still, GM’s outlook for profitability for the year provided earlier this year did not take into account tariff concerns, Jacobson said. The company said in a statement that it will issue revised guidance later this week.
“The costs associated with quarterly tariffs have been kept to a minimum. It’s pretty minor across the board,” he said. “We cannot rely on guidance we have issued previously, because it may be material.”
Uncertain expectations for the rest of the year
GM said in January that it expects net profits in the range of $11.2 billion to $12.5 billion for the full year of 2025, and pre-tax profits of $13.7 billion to $15.7 billion.
These ranges ruled out the impact of increased tariffs or other policy changes under the Trump administration, but envisaged a stable policy environment in North America and estimated $500 million in benefits from a year-over-year reduction in autonomous cruise operations.
Previous financial guidance also included expected capital expenditures of $1-11 billion on investments in our battery cell manufacturing joint venture.
The company has already moved playbooks devised ahead of tariffs, including an announcement that is increasing production at the Fort Wayne assembly plant in Indiana, which will increase 50,000 vehicles a year. The Fort Wayne facility is building lightweight trucks with the Chevrolet Silverado 1500 and GMC Sierra 1500.
Jacobson said further strategies could be adopted, but not before the tariff situation is clarified.
The Wall Street Journal, citing an unnamed source, reported that Trump is “hoping to reduce the impact of car rates and prevent foreign-made cars from piling up the effects of car prices and easing taxation on foreign parts used to manufacture cars in the United States.
GM CEO Mary Barra expressed support for the policy changes in the statement provided to the media. GM rescheduled revenue calls on Thursday, May 1st.
“We thank President Trump for his support for the US automotive industry and the millions of Americans who rely on us. We believe his leadership is leveling the playing field for businesses like GM, allowing them to invest more in the US economy,” Bala said. “I am grateful for the productive conversations between the president and his administration and look forward to continuing to work together.”
In a March memo to employees obtained by the Detroit Free Press, GM instructed employees to focus on their work and to remain disciplined in company spending.
“We currently identify potential impacts from suppliers, vehicle programs, plants and other factors and work wherever and whenever we need them,” the memo reads. “We are in a strong position to navigate this dynamic situation and will continue to provide for our customers, employees and communities. We each can contribute by focusing on this year’s planning, maintaining a disciplined approach and managing discretionary costs.”
Intraquarter issues
GM reported a 17% increase in vehicle sales in the quarter, but was probably in a hurry to buy it before the tariffs came into effect.
However, a fire at ITW, a Mexico-based factory that supplies plastic parts used in seat belt retractors, delayed production in the quarter, a company spokesperson said. This has harmed wholesale volumes of light mandatory full-size trucks, which have fallen year-over-year.
A few weeks of scheduled downtime at the full-size truck factory for upgrades also had an impact.
“The team manages that mess well and recovers those units,” Jacobson said.
Other headwinds, such as a $300 million foreign exchange headwind due to the weakening of the Mexican peso, have affected Detroit automakers compared to last year, due to strong retail sales of gasoline-powered pickups and SUVs, higher material costs and improved production of battery cell modules. Automobile companies’ expenses increased by $400 million due to depreciation and amortization, guarantee pressures and increased labor costs.
Meanwhile, GM’s China business has improved significantly from last year. GM revised its operations in China for most of 2024. This is the second most important market after the US. GM’s business has been under pressure for several years due to the rapid rise in electric vehicles, increased regulations and the rise in new domestic competitors entering the market.
Here are the numbers:
- Net income was $2.7 billion, down 6.6% from $2.9 billion in the previous year’s quarter.
- Total revenue was $44 billion, up 2.3% from $43 billion.
- GM closed the quarter at a share price of $47.03 per share. On the last day of the first quarter of 2024, the company’s shares were valued at $44.99 per share.
- Notable figures: During the quarter, the company’s stock revenue in China generated $45 million in profits compared to a loss of $106 million last year.
- Pre-tax profit of $3.4 billion fell 9.8% compared to $3.8 billion in the first quarter of 2024.
Senior Auto Writer Jamie Larow contributed to this report.
Jackie Charniga covers General Motors for the Free Press. I’ll reach her jcharniga@freepress.com.