General Motors Profit to Rise in 2014
EBIT-adjusted expected to rise modestly on strength in the U.S. and China
DETROIT – General Motors Co. (NYSE: GM) forecasts modest global industry growth in 2014 driven by the United States, China and Europe. Based on this outlook and the introduction of key vehicles globally, the company expects its total earnings before interest and tax (EBIT) adjusted to be modestly improved with improved underlying operating performance more than offsetting increased restructuring expense. Additionally, the company said it expects EBIT-adjusted margins will be similar to last year.
“We continue to perform well in the two most important markets in the world, the U.S. and China,” said GM CEO Mary Barra. “We’re taking advantage of our strength in these countries to restructure and make the investments necessary to grow profitably in other parts of the world.”
GM President Dan Ammann shared the outlook with investor analysts attending the Deutsche Bank 2014 Global Auto Industry Conference in Detroit.
Following 18 vehicle launches in 2013 in the U.S., the company will introduce 15 new or upgraded models in that market this year. In China, GM and its joint venture partners will introduce 17 new or upgraded models in 2014. The company also announced plans to open four additional plants in China through 2015, enabling production of up to 5 million units annually.
Vehicles being introduced in key markets globally in 2014 include the Chevrolet Silverado HD, Tahoe, Suburban, Colorado, Aveo and Sail; Cadillac ATS Coupe, CTS and Escalade; GMC Sierra HD, Yukon XL, Denali XL and Canyon.
Among key accomplishments for 2013, Ammann noted the following:
- Executed successful global vehicle launches
- Received most initial quality awards among automakers in 2013 J.D. Power and Associates Initial Quality Study
- Improved revenue, EBIT-adjusted and margins
- Announced GM International Operations restructuring including plans to discontinue Chevrolet’s mainstream presence in Western and Eastern Europe and transition to a national sales company in Australia with its Holden brand
- Completed the acquisition of substantially all of Ally Financial’s international operations
- Added to the S&P 500 index
- Refinanced $4.5 billion in high-cost obligations, increasing financial flexibility
- Achieved investment grade rating with Moody’s Investors Service
- Monetized non-core assets including Ally and PSA ownership stakes
- The U.S. Treasury divested its ownership stake
- Announced senior leadership succession plan
“In 2014, our focus will remain on winning customers by delivering new vehicles with compelling value and outstanding quality,” Ammann said. “Our ongoing work to transform our company into a formidable competitor in every market we serve will continue unabated.”