G.M. Chief Cautions Trump Administration on Upending Nafta

G.M. Chief Cautions Trump Administration on Upending Nafta

2018-01-17 00:45:35

Negotiations over the future of Nafta have been tense. The next round is to begin next Tuesday in Montreal.

At the investor conference, sponsored by Deutsche Bank, G.M. said it expected 2017 earnings to come in at the high end of its forecast of $6 to $6.50 a share, and it projected its 2018 earnings at roughly the same level. The company, which earned $6.12 per share in 2016, predicted “further acceleration” in 2019.


Mark Reuss, General Motors’ executive vice president for global product development, introducing a line of 2019 Chevrolet Silverados on the eve of the Detroit auto show.

Brittany Greeson for The New York Times

Still, the company’s chief financial officer, Chuck Stevens, acknowledged “headwinds” in the form of pricing pressure in the American and Chinese markets and high costs related to the introduction of a new generation of full-size pickups. Over all, new-vehicle sales in the United States are also expected to decline modestly this year.

Mr. Stevens also said that G.M. would take a $7 billion noncash charge against earnings in the fourth quarter of 2017. That reflects the decline in value of certain tax credits the company has on its balance sheet — a result of the recently enacted tax law, which lowered corporate rates.

G.M. is also losing money or making very little on the cars it sells. With American consumers flocking to roomier models like trucks and S.U.V.s, sales of cars like the Chevrolet Malibu and Impala have plunged. G.M. slashed production at many of its car plants last year.

While struggling to keep its car lines profitable, G.M. is generating a substantial profit on truck sales and making more S.U.V.s and trucks to take advantage of the trend. The 2019 Chevy Silverado, showcased this week at the Detroit show, will be available in eight variations, said Dan Ammann, the automaker’s president. G.M. also plans to introduce new medium-duty pickup trucks, a lucrative business it exited several years ago.

“We see a ton more opportunity” in trucks, Mr. Ammann said.

Ford and Fiat Chrysler are following the same strategy. Ford has unveiled a new midsize truck, resurrecting the Ranger name, at the Detroit show. Fiat Chrysler is adding a new Ram 1500 truck and expanding its line of Jeeps.

At the same conference, Ford Motor offer a less upbeat outlook. The company said preliminary results showed it earned $1.95 per share in 2017, up from $1.15 the year before. But for 2018, company officials said its adjusted earnings would fall to $1.45 to $1.70 per share, compared with an adjusted 2017 figure of $1.78.

Ford’s chief financial officer, Robert L. Shanks, blamed rising commodity prices and unfavorable exchange rates as well as higher spending on self-driving vehicles and lower industry sales in the United States. “We are not satisfied with our performance,” he said.

Ford said it was not taking any charges stemming from the tax legislation.

Ford has kicked off a cost-cutting drive under Jim Hackett, who was tapped last year to be chief executive to reinvigorate the company. As part of its new direction, Ford is spending billions in an effort to introduce 40 electrified vehicles by 2022, including 16 fully electric models. It also hopes to begin producing a driverless car for taxi fleets, rider services and delivery companies by 2021.

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