GM swings to loss in Q2
General Motors booked a loss of $806 million for the second quarter, suffering the effects of factory closures prompted by the pandemic.
Tom Krishner reported the news for the AP:
Even though General Motors was able to reopen its U.S. factories for the last half of the second quarter, the company still lost $806 million from April through June.
The Detroit automaker closed its plants on March 18 and they remained idle for two months due to the coronavirus. Production didn’t resume fast enough to stem the losses.
Like other automakers, GM counts revenue when vehicles are shipped from factories, so it had little money coming in for about seven weeks in April and May.
CNN’s Matt McFarland wrote:
Nearly all plants have returned to pre-pandemic shift levels and US dealer stocks are growing again, according to the company. GM lost more than two months of production during the crisis.
GM has cut advertising costs and discretionary spending, furloughed some employees and deferred compensation in an effort to weather the pandemic.
“We have a track record of making swift and strategic decisions to ensure our long-term success for the benefit of all our stakeholders. We will continue to drive the necessary change throughout the company,” GM CEO Mary Barra said in a statement.
Michael Wayland from CNBC noted:
GM’s loss is a sharp contrast to the $2.42 billion profit it made during the same three months last year. Revenue during the three months ended June 30 slid to $16.78 billion, a more than 53% drop from $36.1 billion during the same time last year.
However, the loss isn’t was bad as Wall Street feared, although a share-price gain during the premarket reversed course in early trading to a slight dip from Tuesday’s close. The stock closed Wednesday down 1.7%.