The first quarter of 2018 was never going to be a good one for GM and, indeed, net income dropped by 59% as compared to Q1 2017.
The first three months of 2018 were roundly poor for GM. Earnings before interest and taxes also declined by 27%, while revenue fell by 3.1%.
General Motors has long known that this would be a weak quarter, though, so the company isn’t concerned about the drops. Chuck Stevens, the automaker’s CFO even called it “a very solid quarter” arguing that it went as planned.
With pickup truck production slowing down to allow GM to retool its plants for the next generation Silverado and Sierra, it expected sales to drop.
Similarly, GM has long known that the situation in Korea would take a bite out of its profits. With production there reducing by 25% and a big bill to foot for termination benefits, the numbers in Q1 2018 are unsurprisingly down from Q1 2017.
GM believes, though, that it will save between $400M and $500M in annual costs in Korea, making the move worth it, as far as the ledger is concerned.
Despite the setbacks, GM said it remains on track to hit its goal of a 10% operating profit margin for the fourth year in a row.
this article first appeared on gminsidenews.com