Detroit, Michigan — To say the least, 2020 was a tumultuous year with many major companies seeing significant dips in profits due to the pandemic and unfortunately General Motors was no exception.
The automaker saw a 4.5 per cent drop in profits last year, though still raked in a whopping $6.43 billion overall thanks to a surge in demand for the brand’s vehicles. The company noted $2.85 billion in the fourth quarter alone.
The leap in profits helped GM offset the costs of pandemic-related factory closures as well as an air bag recall that cost the company more than $1 billion worldwide. Despite attempts to avoid a full-out recall the U.S. National Highway Traffic Safety Administration denied the automaker’s appeals, forcing them to recall 7 million pickup trucks and SUVs.
When GM’s North American facilities reopened in May, the company put the pedal to the metal but wasn’t able to make up for the lost production right away. Inventory was short and the automaker’s U.S. sales for the year fell 12 per cent from 2019. Thankfully the customers that were buying again were purchasing more expensive trucks and SUVs and loaded them with add-ons, which allowed the company to turn a large profit.
The company has surpassed many profit expectations despite being hit by the pandemic. Wall Street analysts estimated that the automaker would make $4.40 per share in 2021, with the actual earnings being $4.90 per share. Along with the years revenue coming to $122.49 billion, surpassing the estimated forecast of $120.83 billion.
The company isn’t out of the woods yet though, with the global shortage of semiconductor chips estimated to cause between $1.5 – 2 billion in lost production. The shortage has forced GM to cancel shifts at multiple facilities, but CEO Mary Barra says that the company’s high-demand vehicles will be safe from the shortage.
“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.”
GM continues full-steam ahead towards making 30 new electric vehicles by 2025 with $27 billion pledged towards the project and a projection to spend $7 billion of that pledge in 2021 alone.
Last year the company saw its largest U.S. market share gain since 1990, and it’s all thanks to a mix of pickup trucks and SUVs according to Barra in a letter to investors.
