General Motors swung to a loss in the fourth quarter on an increasingly difficult environment in China, but still topped profit and revenue expectations on Wall Street. The automaker is also taking a proactive approach with the United States government on regulations and doling out generous profit-sharing payouts to thousands of workers.
Last month GM cautioned that the poor performance of its Chinese joint ventures would force it to write down assets and take a restructuring charge totaling more than $5 billion in the fourth quarter.
China has become an increasingly difficult market for foreign automakers, with BYD and other domestic companies raising the quality of their vehicles and reducing costs. The country has subsidized its automakers.
For the three months ended Dec. 31, GM lost $2.96 billion, or $1.64 per share. A year earlier the company earned $2.1 billion, or $1.59 per share.
Stripping out the charges and other items, GM earned $1.92 per share in the quarter. That topped the $1.85 per share that analysts surveyed by FactSet predicted.
Revenue climbed to $47.7 billion from $42.98 billion, beating Wall Street’s estimate of $44.98 billion.
In a letter to shareholders, CEO Mary Barra said that GM doubled its electric vehicle market share over the course of 2024 as it scaled production. She noted that China had positive equity income in the fourth quarter before restructuring costs and that GM is taking steps with its partner to improve from there.
In the U.S., Barra said that hourly employees once again earned the industry’s highest profit sharing, totaling more than $640 million. Workers will receive a payout of up to $14,500 per person, which Barra said is equal to more than two months of extra pay on average for its United Auto Workers-represented employees.
Barra said that while there’s uncertainty over trade, tax, and environmental regulations in the United States, GM has been proactive with Congress and the administration of President Donald Trump.
“In our conversations, we have stressed the importance of a strong manufacturing sector and American leadership in advanced technologies,” she said. “It’s clear that we share a lot of common ground, and we appreciate the dialogue.”
Trump has made lower gasoline prices one of his key strategies for tackling inflation, but tariffs on Canada could drive up prices at the pump unless Trump creates carveouts in his plan. He’s also eyeing tariffs on Mexico and new taxes on China and other countries. Companies in the transportation and automotive sectors could be hard-hit by tariffs because many have operations in Canada and Mexico.
