DETROIT (WXYZ) — General Motors CEO Mary Barra described during an earnings call Tuesday an unusual situation.
“We are selling every vehicle we can make right now,” said Mary Barra, CEO of General Motors.
Usually, when GM is selling every vehicle it can make, numbers are good. Instead, its second-quarter net profit fell 40% year over year.
“The General Motors numbers don’t look really good,” said John McElroy, Autoline Daily Creator and Host.
McElroy says the numbers don’t tell the whole story for two reasons.
“GM’s got 90,000 vehicles sitting in inventory that it can’t deliver to customers because they don’t have chips. And in China where there have been all these lockdowns and everything, they can’t get money from their Chinese partners. Those things will get resolved and I think the second half of the year will look a lot better for GM,” said McElroy.
“In short we need to bring manufacturing into the United States so GM and all of our auto manufacturers can have chips on a regular basis,” said Senator Gary Peters, D-Michigan.
Michigan Senators Gary Peters and Debbie Stabenow celebrated a bipartisan bill that could eventually help in future years. The CHIPS Act, which would provide billions to chip manufacturers, cleared a Senate hurdle that brings it closer to a full Senate vote.
GM also said that inflation also increased costs and it was pausing non-essential and non-growth-oriented hiring in case of an economic downturn. In the meantime, General Motors deals with a good problem in the face of some economic uncertainty. or now, there is far more demand than it can handle.
“If we have a recession, the people waiting in line to buy a vehicle, the line is going to be shorter. They are still going to make all the cars and trucks they possibly can,” said McElroy.
