GM boosts profit outlook as supply chain troubles ease

DETROIT General Motors Co expects full year adjusted pre-tax profits will reach about US$14 billion, higher than the previous forecast, the automaker's Chief Financial Officer Paul Jacobson said during a presentation.

GM had previously forecast fullyear adjusted pre-tax profits at $11.5 billion to $13.5 billion. GM shares were up more than 2.5 per cent in mid-afternoon trading following Jacobson's statement.

GM'S financial performance is benefiting from strong consumer demand, high prices for new vehicles and more stability in supplies of semiconductors, Jacobson said.

However, GM'S vehicle production and inventories won't get back to normal until late 2022, Jacobson cautioned. Tight inventories support higher prices, but GM and its rivals are still working to find a balance between stocking too many vehicles, as in the past, and too few for a US market where many consumers still buy what is on a dealer lot.

GM is also wrestling with rising costs for commodities used in its vehicles.

"We see inflation everywhere," Jacobson said.

So far, Jacobson said the company is not seeing much impact from the new Omicron coronavirus variant.

"We are continuing with the protocols that we have put in place, that have worked," Jacobson said.

During an online talk with Credit Suisse auto industry analyst Dan Levy, Jacobson said GM will be aggressive in investing in electric vehicles and other technology as it tries to catch up with electric vehicle market leader Tesla Inc and compete with rivals such as Volkswagen AG and Ford Motor Co .

"We have pulled forward about 12 EVS from the original plans a year and a half ago," he SAID.REUTERS