General Motors earned $2.4 billion in net income in the three months ending in September, a big drop caused by the shortage of computer chips that has disrupted auto production around the world.
G.M. reported Wednesday that revenue in the third quarter fell 25 percent to $26.8 billion. In the comparable period in 2020, the automaker made $4 billion in net income on $35.5 billion in revenue.
“The quarter was challenging due to continuing semiconductor pressures,” G.M.’s chief executive, Mary T. Barra, said in a letter to shareholders.
The profit total could have been even weaker but it included a $1.9 billion payment from the battery supplier LG Electronics that was related to a large recall of Chevrolet Bolt electric cars. And comparisons with last year were made more daunting by the unusually high demand for cars early in the pandemic.
In a conference call with reporters, Ms. Barra said she had met with a number of semiconductor suppliers to improve G.M.’s supply of computer chips. “We are specifically working on a strategy to make sure that we are not seeing these types of constraints in the medium term and certainly in the long term,” she said.
The shortage of semiconductors has been forcing automakers to idle plants for weeks at a time. In August and September, G.M. halted production temporarily at plants across North America, including several that make its highly profitable pickup trucks and large sport utility vehicles.
That left dealers with tight inventories of new models to offer consumers. In the quarter, G.M.’s new-vehicle sales in the United States fell by a third. Its pretax profit in North America fell in the third quarter to $2.1 billion from $4.4 billion a year ago.
Despite the chip shortage, G.M. said it was on track to make a profit of $8.1 billion to $9.6 billion for the full year. That is a brighter outlook than the automaker provided three months ago, when its projection was $7.7 billion to $9.2 billion.
G.M. needs to continue ringing up large profits because it is investing heavily to develop new electric vehicles and to build plants to make them. Ms. Barra said a new battery plant in Ohio — a joint venture with LG — would begin production next year.
G.M. plans to introduce 30 new electric models around the world by 2025, including 20 in North America.
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October 27, 2021 at 07:04PM
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