GM CEO Mary Barra

GM’s Mary Barra said in a letter to shareholders that the company performed well in 2020.

This story has been updated with additional information about the semiconductor shortage, 2021 guidance and Bitcoin from GM’s earnings call.

General Motors reported fourth-quarter and full-year profits for 2022, despite the negatives associated with the COVID-19 pandemic on sales and production – the fourth quarter made a massive positive impact.

The company posted net income of $2.8 billion for the fourth quarter on revenue on of $37.5 billion. EBIT-adjusted income was $3.7 billion, resulting in a margin of 9.9 percent. Much of that came from its North American operations, which reported an adjusted-EBIT income of $2.6 billion and a margin of 8.7 percent.

For the full year 2020, GM reported net income of $6.4 billion and EBIT-adjusted income of $9.7 billion on revenue of $108.7 billion. Unsurprisingly, its North American operations provided most of that with EBIT-adjusted income of $9.1 billion. The results came despite a drop in global sales from 7.7 million vehicles in 2019 to 6.8 million last year, although it did beat its Q4 2019 sales number by about 82,000 vehicles.

The results were strong enough to secure profit-sharing checks as high as $9,000 for GM’s UAW hourly workforce.

Impact of semiconductors

The company expects to take a $1.5 billion to $2 billion hit to adjusted EBIT due to the ongoing semiconductor issue. Paul Jacobson, GM’s new chief financial officer, said the company believes the shortfall in parts to be temporary and that it won’t impact any long-term plans or programs. The company’s shut down or slowed production at four plants at some point, most recently its Fairfax, Kansas and San Luis Potosi, Mexico facilities.

General Motors Arlington Texas plant

Pilot assembly of the 2021 Chevrolet Tahoe at GM’s Arlington Assembly plant.

“Our intent is to make up as much of this production loss at these plants in the second half of the year as possible,” he said. Later he noted that the company’s been adjusting its existing stockpile of chips, shifting them to different facilities to keep production going.

Adjusting to the pandemic

“GM’s 2020 performance was remarkable by any measure, and even more so in a year when a global pandemic caused companies around the world – including GM – to temporarily suspend manufacturing operations to keep employees safe,” GM Chairman and CEO Mary Barra said in a letter to shareholders.

“Our dealers also took extraordinary steps to protect our customers, such as providing seamless online shopping, purchasing and delivery solutions.”

The company worked at “ventilator speed,” Barra said, adjusting to issues the pandemic presented the company, the aforementioned sales and production issues. Barra added that the company’s profitability was aided by the quicker-than-expected sales rebound and that Chevrolet, GMC, Buick and Cadillac officials were ready to handle it.

Being prepared drove the company’s largest year-over-year gain in U.S. market share since 1990, Barra said.

Electrification plans uninterrupted

GM's Ultium Cells battery plant construction

The first steel goes up during construction at the all-new Ultium Cells LLC battery cell manufacturing facility in Lordstown, Ohio.

Additionally, the company continued with its electric vehicle development plans, and even expanded them during the tough year, raising its investment commitment to EVs and AVs from $20 billion to $27 billion through 2025, netting 30 new electric vehicles during that time frame, with a goal of selling 1 million EVs annually during that timeframe.

“We are excited that our commitment to an all-electric future is changing how people think about GM,” she said in the letter. “We’ve gone from being good stewards of a successful traditional automaker to being champions of growth.”

Barra also noted some of the other EV- and AV-related projects and milestones the company managed during 2020, including starting construction on its new battery plant in Lordstown, Ohio, which is expected to be ready before the end of this year.

Expectations and expenses for 2021

Jacobson revealed the company expects its adjusted EBIT for 2021 to come in between $10 billion and $11 billion for an earnings per share range of $4.50 to $5. That includes a capital expenditure spend in the range of $9 billion to $10 billion. The company predicts new vehicle sales will be in the mid-16 million range this year. Buyers looking for a new vehicle will be disappointed if, as is now the case with Tesla, they want to buy a new vehicle using bitcoins, as CEO Barra says the company’s plans for Bitcoin are none.

“We don’t have any plans to invest in Bitcoin. This is something we’ll monitor and we’ll evaluate it. If there’s strong customer demand for in the future, there’s nothing that precludes us from doing that,” she said.

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