GM is hopeful despite 2nd Quarter Decline

This is not GM’s first go around with economic crisis

Like Ford and many other world leading auto manufacturing companies, GM suffered severe financial distress when the economy crashed in 2008. At the time, GM required government assistance and a payment deferral program in order to keep its doors open. Since that time, all loans, as well as net income to shareholders have been paid back in full.

Perhaps, the resilience the company showed in surviving the 2008 economic crisis has been a cause for hope that it will once again rise above the setbacks it has endured because of the 2020 pandemic.

Ford and GM have some key differences between them

General Motors is a larger company than Ford. The latter reportedly resumed normal shift operations in U.S. plants sooner than expected during the pandemic. In addition to being the smaller of the two manufacturing icons, Ford also produces less brands than General Motors. In its adjusted pretax losses during the shut downs, Ford says it did $3 billion better than expected.

Despite Ford’s impressive performance in a time of global crisis, GM continues to be the largest automotive market shareholder in the United States. In 2019, the company was responsible for 17% of total sales within the industry.

GM is looking to the future

GM’s CFO says the company is confident it will rise above the challenges of the second quarter and is currently planning strategic investments that will be crucial toward future success. The U.S. remains GM’s largest profit region although dealer inventory was extremely low in recent months.

During the coronavirus pandemic, GM sales plummeted 24%. GM says it was well-prepared for the downturn because its primary focus in recent years has been budget trimming and cost effective initiatives. Moving forward, the company plans to focus on tech savvy vehicles and crossover programs. As of late July, U.S. GM dealer stock had already increased 9%, leaving the company confident and hopeful that things are looking up. GM spokespeople say the company is known for its innovative ideas and ability to rebound when times get tough. Overall, the U.S. automotive industry performed better than expected in the aftermath of the COVID-19 crisis. It is now focused on rebuilding and holding its own as a global leader in the auto manufacturing business.