GM - Earnings call transcript Q3 2017 | General Motors Company

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the General Motors Company Third Quarter 2017 Earnings Conference Call.

As a reminder, this conference call is being recorded Tuesday, October 24, 2017. I would now like to turn the conference over to Dhivya Suryadevara, Vice President of Corporate Finance. Please go ahead, ma'am.

Dhivya Suryadevara

operator. Thanks, thank for us XXXX. the and GM's we for results financial third you morning, as joining review Good quarter of

press the this materials issued release the Our call conference morning, are Investor GM and on Relations website. available was

Barra, via in this set this in Chairman color brief to the GM's had notes also we in takeaways key on published Included This provide call Executive pages are by will the webcast. the VP morning, CEO, We from provide morning, remarks; the CFO. opening broadcasting chart Chuck materials each Mary GM's results. and Stevens, chart and order some followed

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Mary Teresa Barra

repurchases we adjusted We results Thanks posted, production to cash basis trailing of good mobility. we in XX.X% quarter adjusted is capital a return returned $X.XX. four to are and margin adjusted our planned third billion. a The the of is core through our redefining even continuing future numbers our Thanks, Dhivya, is share quarter $X.X on We dividends look and $X.X with lower the diluted EBIT billion reporting X%. personal EPS solid America. basis. business Taking And and North invested a delivered a with for in adjusted strong Year-to-date, demonstrate on shareholders $X billion joining. on morning, extending everybody. today at commitment results operations is our EBIT performance while

few than share challenging strong regional minutes. another year. expected, we will a more Chuck market will in details in additional Although is deliver numbers

the return continued with focus to business. areas our work the and Opel-Vauxhall with strengthen on Our business the of of sale closing higher shareholder

close of We sale Financial's the year. the to the European of end by operations expect GM

our international that the month plan effective us XX/XX/XXXX. will GM announced, operations combine history. brand growth in up Chevrolet, to performance previously our Engle, of customers allows in crossover XX% earlier efficiencies and the North opportunities. Barry our our are addition right this standpoint, long-term of sales and responding year-over-year quarter brands restructuring Cadillac disciplined best the Buick realize GMC, product From we operations States, favorably America launches. markets to focus we sales In to operate and supports from and to we In outside a greater crossovers our on China United to and shared new retail for were vehicle under This to all strengthen

on new of second generation Buick brand. Avenir, upscale Enclave builds XXXX and predecessor sub The in ushers arriving dealership. success the It of at Buick's is its the

five on the next influencers sub-brand positive in Super growth launch customers the overwhelmingly prices. arriving with in coast-to-coast hands-free Cruise, demonstrate in Journalists transaction premium Buick pace, Also Denali a its U.S. driving traveled record Avenir Sales high than tracking led up margins our as our dealerships Super makes Cruise CTX. at is with year generates recently and highway will China a GMC's to XXXX by overall China technology. and GMC's SAIC will launched and more partner SGMW. at Cadillac are it an the Cadillac CTX and offer reviews. joint industry also significantly at and momentum, JV capability at and expectations luxury brands. making of joins retail Avenir We Last XX-year launch GMC Denali electric largest have EXXX average sales we Denali premium from our higher high for channel. market I quarter the quarter, attainable millionth our South levels. in XX helped market. prior models with in EV. of from from new the This month and additional QX. now We representing China me – to are build-to-order a production our venture milestones still the productive It or celebrate vehicle is excuse in Shanghai, To vehicle. important And in we niche depressed in our plan America, Baojun. GM our share Baojun including partnership this money in a was six an continue models gaining

our do in in operations in and all-electric we coastal our be to the better by like an we XX about future I'd quickly. months. and be done new to already industry mobility. by to that the and give world impacted to disciplined, our will core future. is mobility lot these our have resilient work, a the By two trends. markets staying increase because of Regardless new more initiatives well safer, centers including time, urban future, markets. We've healthy business will the vehicles we mobility and help announced all-electric accretive investment At meet plans through commitment. to model we for core at be opportunity and will repositioned the cycle sustainable know a have and XX where key innovation us all next necessary the are We talk hard into continue create core XXXX, focused committed they to very customers personal Now, the us and generate least this the an business, strong last we of that of made business business to same exposure the believe more investments to new future have We our changing profits a will

partnerships and record on us give that to Volt a mass supplier portfolio with strong electric extensive and profitable market have experience generation we vehicles. confidence learned this a the the EV along Our what path EV manufacturing from Volt puts including with new track of Chevrolet electrification, us Chevrolet

will will meet hydrogen electric transportation both We because solutions battery all technology need customers' for we of cell needs. our both to pursue and fuel

autonomous recently I'm For and revealed here GM Superstructure that a test electric third our Utility also believe SURUS. vehicle. delivery redundancy example, to necessary new provide utility was fuel latest making generation technology refer new meet the an natural Automation and It capable the military environments pleased solve by driverless without designed AD teams cargo systems The and including adaptable called ability deployed and complex for months. our generation its Silent make is the and hydrogen requirements as global It it or fault-tolerant transportation services. But to software almost technology. progress operate on logistic in a challenges to vehicle. to self-driving Universal created our use. vehicle unique commercial is self-driving integrate of Rover and to driver. cell we Cruise flexible platform tough to worked We have XX and hardware will solutions we a Cruise completely GM team with the conflict disasters, with just also are it together vehicle safety best

to generations. self-driving of compared electric the latest content fact, XX% generation test has previous In unique about vehicle

and fastest more cars just are pedestrians urban we the the In acquired environments compared and in to also announced gaining technology encounter the put access that cars other testing because deployment with times This and the two And this capability so self-driving we self-driving New vehicles weeks even on to York City a in in by testing will anywhere, To self-driving begin fast challenging our a LIDAR speed, path improve we Another cost we ago, self-driving more environment, our reason most office scale. is recently testing we San path XX of be cars on complex almost interactions one as move road believe and will we is opening will suburban our self-driving driving the deploying to Cruise LIDAR Francisco. are safely there each to us and XX%. new intersections at well. accelerating of Strobe, technology, moving environment. of with cars it reduce of significantly we toward

a hail select Automation GM use in we beta Cruise app employees San Employees launched August, Anywhere, a a ride for vehicle. ride-sharing to a electric in in Finally, test smartphone platform Francisco. test Cruise self-driving

the experience us aspects self-driving to appropriate more go-to gives of Focusing the on strategy. flexibility develop all market

I GM Our ambitious, mobility is vision our believe we personal provide uniquely for how is customers. transform and to positioned

solve right the We and have to to along passion team technical world. with change with expertise the the problems right business the

host investor share now We this to it details, over I'd more like turn to to stay And year so an later Chuck. will tuned. event

Charles K. Stevens

Thanks, Mary.

our core plan. the demonstrate operations continuing continued from results quarter disciplined of resilience business our and third execution of Our

XXXX. All were happen this first since of time This our not operating for by segments chance. quarter did profitable the QX

cost including product cars our reduce Our trucks, to the our next-generation downtime inventory. strategic the of planned our decisive passenger with in are for and solidly paying generated America the efficiency initiatives, to closing We production profitable full-size measures addition margins off. deal, X.X% and launch North remain Opel-Vauxhall to even and actions of cadence in right-size

equity year-to-date first in three margin X.X% South adjusted to $X.X net continues of to nine adjusted generate and strong revenue year. We third and record EBIT the EBIT years. adjusted the of GM quarter $XXX.X Financial profitable China of generated its of of contributing income of revenue net America quarter. adjusted of margin X%. $X.X EBIT first a $XX.X consistent quarter, had billion billion, EBIT in an an had third generated billion billion, We've months a and

$X billion flow by primarily During we in expected with the as downtime. cash consumed we our quarter, impacted production cash

to to capital $X flow. production And shareholders approximately working cash capital levels we to automotive anticipate importantly, to normalize, in still this we quarter year. fourth plan free contribute adjusted billion meaningfully return As

segment a on EBIT Moving $X with delivered billion, has consistent of North XXXX levels billion adjusted margin revenue lower $XX.X revenue. and margin, details. to adjusted EBIT X% the of year-to-date America XX.X%

revenue For a wholesale a planned mix $XX.X the driven cars in mix was from quarter, than as America performance headwind retooling. reduced which North million billion. with billion offset an $X.X truck EBIT-adjusted improved about XX% production we $XXX billion more from margin headwind despite The by was third reduction of the of $X.X largely volume. X.X% was

inventory us about to actions the compared contributed year end with cost performance. also we've of million in continues. dealer Solid including warranty on focus of cost $XXX down XXXX. the allow end the improvements taken our And to will to The

incremental and North in margins new America on our initiatives continue engineering, technology XXXX. in investment we more billion cost than efficiency third XXXX billion plan quarter, than have we more more of the in our $X.X the which During the offsets and the XX-plus D&A. for cost end to strength crossovers, year generated percent strong $X of XXXX, to disciplined and Based of achieve project aggressive goal since full by

China. of with on at million generated of least the a total year-to-date, quarter calendar X% of flat year-to-date. both third Moving deterioration China another $X.X income to remains for income $XXX of year-over-year. in billion equity challenging equity Pricing

efficiency cost on growth will of quarter and have allowed focus are in be strong evidenced as the strong of our XXXX income, we strength the Our another and overall recent of forecasting pricing equity year headwinds and equity that income. Cadillac us by to mitigate another launches

of past Turning increase billion loss a less an the $XXX-million benefits to improvement $XXX million, South taken America. the was EBIT-adjusted and the XX% year improved actions over Year-to-date slightly a macro years than yielding revenue from climate. ago or year-over-year in as are was a billion, $X.X several we've $X.X

region the in billion generated in years. of progress off our Our in paid third $XX first three the profit million revenue, adjusted quarter $X.X of America of as EBIT South

the by the quarters $XXX Another million the up see fourth $XXX to revenue in residual GM a primarily XXXX, billion, before One up XX, value we resulting $X.X to third XXXX, of taxes changes of quarter months in $XXX million some from XX% million, Financial Financial or quarter to performance for bit do third $X our December quarterly XX% quarter in $X.X the taxes, XX% third organizational than of change Year-to-date versus three is and of of three about of because generated headwinds our billion. GMF ended GM Financial. earnings revenue year-over-year. We by used more segment had that in earnings housekeeping. structure. generated quarter XX% almost record of XXXX strong increase in car third billion quarter, about pricing. before driven up the almost through Beginning segment GM intend reporting driven about

South international our reported will result, a segment combined be As international GM operations America one called International. and as

lower Our volumes. quarter not and North Financial America significantly summarize, GM was To be will overall segments impacted. with another even this solid

we've actions taken of Our the in margins the cost resulting structure. solid a a focused benefits most with illustrate business strategic simpler, leaner

well-positioned lower taking, we be going dealer customer production to meet levels into balanced With year-end than better with be and the demands. inventory we that will XXXX, XXXX actions to inventory project disciplined are

the about think we of more our is year. we the As expected full at than challenging the operating year guidance, beginning environment

to financial labor We Despite in headwinds, these including automotive results continue recently Raw resulted down flow $X XXXX time. are America. situation production billion. in in the to rise, EBIT-adjusted cash lower in and adjusted in adjusted margins revenue, project free adjust we take in posted approximately passenger record on line the and North car and response resolved strong the for actions generally to unexpected the EBIT we material year results demand that Canada we with of costs

about to project to to comments. to now share than $X $X.XX, return American committed. of income margins billion of per middle previously earnings We XX-plus the percent, concludes call. to of of North shareholders in XX%, $X our move adjusted We'll question-and-answer the also and billion, portion to the range opening China greater we equity as ROIC This about of of continue continue forecast $X the

Operator

Our line Citi. from come with first of Michaeli question Itay is to the going

Itay Michaeli

Good morning, everybody. Thanks. Great.

Charles K. Stevens

morning. Good

Mary Teresa Barra

Good morning.

Itay Michaeli

other could of on truck for to in launch profits, kind segments How relative company? years. the you couple the as resilience talk North segments of attribute the in pickup new results do truck of you in segment other next America, the terms Just prepare much in pickup to relative performed the of how trucks the variable hoping pickup Chuck, to you about particularly

Charles K. Stevens

on constructive Itay, where about results. at are especially and share we Number Yeah. about as Good of hold these lifecycle truck to view some one, and that question, before trim I've results, at profit the basis, in trim, of share. this talked quarterly given that continued the we've cab, our kind XX% we our crew a more margins to cab, up variable are on data on you XXXX. year-to-date But basis regular when cab, look extended a in versus XXXX segment importantly, calendar actual same-store of a

to expect given X.X% and big when the last significant taken years North same of and more in of production the continue the couple the to paying and we cycle America. able we the through a improving move this to been generate We've drivers clearly, off, overall over we've look had we actions margins see vehicle, So, strong of as variable life would demand. of price of you perspective. that's from And the opportunistically one overall the that's margins at downtime

Itay Michaeli

for I then on Hoping alluded just America, think for last your preliminary we That's able you code helpful. margins as of And update views about zip North under XXXX us macro maintain you XX% that kind of Chuck, North being accommodative in conditions. kind to to quarter, think XXXX America. of perhaps can

Charles K. Stevens

cadence in I we're the business in model launch would consistent. product that's the point and taking In update we've a is no our been is XX% generate that say at consider North we've changed, and this not that view current what time, that certainly America, executing. environment, our that expectations will margins focused has macro built you on when especially cost actions That

Itay Michaeli

demand maybe if we're of get in in I lot Great. been could category question. quick And of SUVs. as the some product looking I well competitors the about think aggressive to sneak and There's one for talked a off-road of more talk, your a seeing

these to about is that And there you so your maybe maybe well segments? just, some do you are of as as well one of forward, thing talking opportunities markets that the to redesigning the product think any platform? that your some you can anything And new truck as to those GM for kind attack used you think mind about HUMMER about as plans is to of peers comes have, penetrate and going

Mary Teresa Barra

an come think including customer and out when off-road broader from having see going SUVs, see full-size addresses you I needs the that platform us to capability. specific truck new truck a portfolio both you're really

Itay Michaeli

Thanks very That's helpful. everyone. so Great. much,

Operator

next line Our of Bank the of with John will America. from come Murphy question

John Murphy

guys. morning, Good

mean CapUt Just America XX% here of you North the margin sort up looks you test Chuck, the we wholesale yet when year-over-year, America. a went margin. volume and in the put kind the XX.X% of I X.X% look additional versus I follow-up on at North one of cycle, drop on mean, it of shock like the downside in sort X.X% in through EBIT

there you'd and you're if CapUt was So, myself XX%, a that on it was of again? is wholesale you thing number in negative I'm money. be not bit, old that up school dating shock losing this going and a or a of big be you'd kind repeatable maybe outsized might decline mean, here. if the think anything like breakeven But I benefit, in is about repeat little you put you the XX%, around thought an this quarter of

Charles K. Stevens

margins for years. about execution been model a business but that And the is and Obviously, point fundamentally breakeven about that that resilience we've year. But to for only the that were QX we've the last number of the QX point our I results the reinforces one crossovers I think million got years, and look continued of I thesis this think we've our mix, significantly on last and of proof units. and QX pickups wholesales higher that of the the Well, a launch QX SAAR full-size to associated XX point than year. again, clearly kind model, In plan and talking business this demonstrates cadence X.X% not that would reduction breakeven versus model interesting XXXX XX the significantly level talking at fundamentally of that be the improved restructured a of last volume is a SUVs revenues that. And number of can that maintaining last big we've with full-size comparison seen. at of drivers think been business withstand of year, just

John Murphy

very could of of I Berlin, of obviously then, this would here, a like London Mary, actually getting presence there? done need a have business sort European a be Yeah. could the mobility about mean, sale you've the how than helpful. but – And mean, actually actually would operate I what That's and and opening from we mean, as you office be Paris, I execution about of hear sort think manufacturing, we service Cruise finally Europe in do I presence mean, done that profitable more and be you it or away in attack outside and lot can historically? you're getting a you operate

Mary Teresa Barra

Oh, absolutely.

generate We globally. We're a have to looking perspective, that we're then area, shareholder in and technology but what the are performance on at self-driving going to working looking from extremely the sense to vehicles hard and to perspective, it working safety the value. most already make markets most lead be hard a evaluating we're

John Murphy

European And obviously markets are list? that on

Mary Teresa Barra

Absolutely.

John Murphy

the then XXXX lastly, about are for be they R&D or CapEx budgets, and And and future should all are on significant thinking just Okay. your in there contemplated beyond? existing we XXXX, step-ups efforts, in funding any your car

Mary Teresa Barra

Generally, by EV to at is being able in in do engineering reuse synergies lot AD when on the perspective, do especially development. we and look that When going capital perspective. driving we equipment, but that's architectures, is and want to connectivity of we included, a able and the look at reuse also product from way a to current the and work the been we've all continue that efficiencies, the that largely an we our then We're capital because that view the to in the that, to going had are perspective we'd evaluate spend spend, work budget.

We to want bounds. those don't will speed say advantage. able we being I'd it's to right the we by fund. But is constrained know important So, now, get mover to be first generally evaluate because within

John Murphy

the on any And or have did integration parts just M&A pieces you more those to different for do or a up one each quick that. like puzzle there AD Is follow of you lot feel already? do like with need any to you Strobe vertical

Mary Teresa Barra

lot of we Yeah, have pieces. that the I do a puzzle feel

very look and dynamic We continue marketplace. is at to evolving it. a This

cost with with do really saw think at how the that work is real up we which look I opportunity, LIDAR autonomous of partnering areas really at taking an Strobe the significantly also capability the capability. technology, ability to the automotive-grade and to open where out Labs opportunity do you that technology to we Research the getting the the an gives vehicle can you Hughes improve to while the

to So again, share moving with to the we'll to allow makes continue But we're us to with what and look this right is deliver most to evaluate. go sense I to and don't fast going anything safety, now. at speed, have value.

John Murphy

York. seeing forward these New We're to Great. Thanks so things looking much. in

Mary Teresa Barra

are too. We

Operator

come our Barclays. of question from Johnson next will And Brian line the with

Brian A. Johnson

downtime the of business start kind cars, North drag can questions then I'll from impact way? up uptick just dimension walk EBIT? GMNA the Hi. the what how follow kind on downtime versus with and in the America, you a crossovers the we the the from economists. crossovers some today's that Within the in of gauge of Specifically, can on in different pickup trucks the was

Charles K. Stevens

question, within, that I'm and not ready really I'm I by Boy, Brian, break the down good but following. say, to segment volume would mix sure

to the think way it. Here's about

Of drove of in mix volume the And the billion, but portion was cars XXX,XXX was talked impact cars trucks favorable planned roughly the Half the of and trucks other or passenger Aligning were XX,XXX largely passenger balance related, of number, were down full-size that so. mix. we favorable the XXX,XXX full-size half, the that was cars. that, and look roughly. demand units Our about was launch you The that which on were the supply reduction that was and was that, roughly And of was that quarter, XX,XXX crossovers. was then piece at as volumes roughly units. obviously, CUVs. and $X.X

at of little that helps as a But detail. each that as those far that associated to with moving share pieces, ready level hopefully, bit. numerics So dimension not of

Brian A. Johnson

put assume other I launches? majors the mean, And ways, crossover that's pricing for materials I mostly positive. Is that, crossovers, less

Charles K. Stevens

to was very, the car crossovers driven, segment right, largely be away. as and passenger people carryover continues Majors that competitive Yeah. as shift very and were

Brian A. Johnson

Okay.

Charles K. Stevens

would I to of on pricing the fourth be favorable back quarter quarter And crossover largely the launches. expect versus third

Brian A. Johnson

And or Okay. accurate roughly about could anything trucks? downtime through you the is you downtime for CUV truck the say IHS that? how and Are planned for the downtime around

Charles K. Stevens

number mean, year? talking or I XXXX? about XXXX IHS are next the you for What's

Brian A. Johnson

Well, XQ and XXXX then XXXX. into

Charles K. Stevens

I Yeah. this. it would at look like

We XXX,XXX expect QX production up have on downtime SUVs. QX, factory don't unit on versus versus roughly be be up, trucks sales We QX expect Actually, units. to we to full-size up those any segments. or production to be

We passenger we'll say will truck clearly And to January, continue to to this into make look in adjustments clearly, the as year, downtime is more XXXX incremental we cars. launch. related when appropriate on next have but there and about in

Brian A. Johnson

Okay. terms using, kind that, lot in analysts, update thinking Cruise building a how the probably of the but human this putting their the preliminary own of taking of talk the But are service. cars talk of test with in provide not producing Day. on those with just and to Can And into the about timetable any shared more admittedly, Investor us your press, autonomous out? ride-share driver you'll autonomous employees sort around of you drivers backup revenue

Mary Teresa Barra

as the we've able so all, have metrics will our – to new of say. anything we maintain being out we customer. much is talked by take relates to do think very in about the with how quarters, to gated but look be, that, will we relationship the And will safety, we deploy, we at we it to have defined to don't I that that's years. What believe we'll first want ready So, when it to driver be not and be

our options with exploring could we're at that their Cruise needs. people Cruise are so, employees someone, have all used of or participating fact we being our of well, it the partner partner those in that work is for many on pilot quite with their many using application going some transportation we with And in and own is

open. we So, options we're to it develop that, keeping continues our to – and continue

Brian A. Johnson

Thank Okay. you.

Operator

line come Rod from the of Our Deutsche next will Lache with question Bank.

Rod Lache

Thank you.

that of scenario such Just the mobility envision question China? business? last Can that markets where business. that these following invest mobility something on a for needed your for is certain some you as in partners And global maybe

Mary Teresa Barra

that accretive. – and Certainly, going the and of We're our technology at can AD we our and so technology. It's fourth. what everyone that could quickly. shareholders business options term opportunity to keeping – because And the lot is roof in technology move evolving. And gated significant one our working vehicle the we generation vehicle this third mentioned be a everyone. that to is vehicle, of is open. on kind having evolving everything gets look of on we're to test by a point I have over talking where going the We're for all fact round, this kind the in provides value it we parallel already look of possible. is why greatest our the to have focus get we're us continue is to long under we we're on think is that's The very that conversations,

how a business our primary evolving we're that model look focus. perspective, and quickly, then is speed So, technology that's most hardware advantageous we a with a for to put to from But both going do and so our software that together is shareholders. launch

Rod Lache

is lower Interesting. primary the auto think targeting And fourth the your cash it an in to driving the year the is Is targeted. expectations, quarter? of factor that And in production, decline you're lower the inventory year? the and XX maybe for U.S., of previously you talking production flow you mentioned the if that free adjustment the target for end then that business, that's at just that than about had days the I

Charles K. Stevens

Rod. things, a say of would couple I

the dependent December. on start let's the First, with will supply nominal the largely rate because day be sales number in

Rod Lache

Right.

Charles K. Stevens

the our range. target is XX-day to be So, in

now view the number we're right I lower at overall XXXX important nominal And our significantly more the to be XXXX. think end versus of the is the number. of is going end

Just around of XXXX. to We zip in dealer be think the dimension that, we in inventory we'll end had XXX,XXX XXX,XXX. somewhere the that code at units of

balanced. Importantly, within be better that, it will

trucks of days supply and cars SUVs of through XX-day in passenger of that. appropriate the for crossovers is an XX somewhere XX level roughly us, of have crossovers, normal to and expect We work XX, zip we code as days of which

in is that free I inventory But a kind rightsizing the from and to continued and level good that At year launch also the the there's lost end units point we production. day, that the capital and impact as strike the think we aligning about that into on end cash we made an flow working has forecast, day had Built obviously, impact up of that our Canada, you that the with XX,XXX that think XXXX in have there's timing. and strike. be which the supply. of won't

think the from the importantly, and adjustment we we've generation, than and earnings obviously, in cash timing, of $X about production end distribute I shareholders about billion including is the maintained within still expect strike think, billion our liquidity since to overall I impact And guidance. is $X billion So, to $X position. guidance year more that, strong a to though,

look consistent very at very, those when parameters. So, overall you

Rod Lache

XXXX? preliminary what's year-over-year thinking And should expecting you that launch, as could term? you. in were you like seems thoughts it as be you longer – how out just GEM's platform launch. think the – the this clarify truck asked from the as be we magnitude well I XXXX, you're of about Thank Any the the on should And look about benefiting Great. earlier for downtime we to trucks production

Charles K. Stevens

weeks would this everything And the be always downtime but to say, best downtime five and optimizing and else. six significantly speaking more. at ways because versus or less, XXXX I overall, trucks broadly we that. overall, there'll towards I will will would early we whether it's four evaluating in optimize weeks look weeks, the are less XXXX or look that's Yeah. days be But

of the get we go launch and to a very also work it's We'll bit early. America look at of there the X continued business. the which portion portfolio, our you at the – I So, sit launch provide objective couple remember, will me get our and impact. to units way a Rod. year, for to continue the able it's cadence, favorably full will be our thousands in I clearly, we the to towards we'll benefit think cost impact for China. the the environment, in want us broad launch, to point be first I guidance on But, shouldn't this when XXXX TX of It's why as you in be see the to because, next hard certainly, will want don't GEM core but of that on biggest execution, launch, be well that macro minimize XXXX. of little say benefit XX% truck that Once full-size through again, launch we margin progress see time and way years South no of through going broad in this reason yet,

Rod Lache

Great. Thank you.

Mary Teresa Barra

Thanks, Rod.

Operator

Brinkman And line JPMorgan. the our from with of come question will Ryan next

Ryan Brinkman

taking at Hi. on Good in morning. for my than periods you there money volumes lost see Thanks South I firstly making questions. that lower America, money. Maybe you're when past

there. questions Just a couple of

any could last anymore losses on that same next that now of you so earn downturn cost are flexible there the in profits time there reduction experienced could sharp volume footing operations better the maybe then And that higher degree when there avoid you put this structurally you such the down the normalizes? is cycle? that secondly, does another the Firstly, you

Charles K. Stevens

there the yes not our results out the a recovery on reduced versus the minor And think that minor highly that upside. seeing to quarters in directionally, fundamentally, you're play a answer Well, Thanks to in we've mean, the least leveraged is the the only to we're Ryan. XX% recovery in we've Brazil. where South put I board question. America for the that market breakeven at and by two America I in in but yes was South last point prior and peak started importantly that,

that and we're country America, architecture portfolio in entries our production means talked volume huge of in higher of the in market within cost in the constructive we've the in which XXXX is across on there our shifted global our out scale to São top America, emerging more the South which low-cost you Gravataí. from benefit largely multiple market So, of facility improvement of produced South will Paulo about about America, in product South Gravataí XX% that, and come the layer market continued when flexibility. by

the way got partners playbook out take our a America ability in back dynamic from of has rightsizing it North without the on running lot around speed So, flexibility the a South from a the competition, ran fundamentally, labor makes some of, job if more much would in they've driving the benefits with flexibility the same perspective. in eight the front seven of out model. done there people the exceptional more advances to America say, team labor and business that, board it we bumps of across the well years building and an resilient in and And or along do kind ago business, cost structure look I negotiations you at more

Ryan Brinkman

just Okay. the the lastly Thanks. in from international operations. also And then, improvement me on consolidated

to the the or some sales announced Firstly, did assembly I actions investors the changes of XQ? to Secondly, last on of there. your you press of how Australia, some XQ Korea ended then, the there? on such that from operations in discussion call domestic those already be And you about and India options of and or What much you improvement to in come? think are sale think been benefit of thirdly, the in as the wind-down to the to Korean some sequential just relative for savings quarter operations table has African yet the might improvement possible are how XQ drive in about profit able there a the

Charles K. Stevens

Wait. questions Those one sentence, a were in Ryan. lot of

going which go-forward down said In restructurings we of basis. exiting not $XXX to the be a GM took remember winding but fundamentally we run-rate million a can year I India headquarters, that and it the that a QX, South of the benefit materially. if domestic consolidated on all. obviously that see about me impacted that operations, business, portion Africa were a them was was Let There

think in those down exit as reduce and kind typical wind Commodore that of year on most in to to we see that you're of only level on but benefit, the just the think path a that's I that I starting of a XXXX think of producing Australia. if basis going been operations. about Australia given you $XXX production. would production, facility, million We're we've a a manufacturing, year-over-year

through, going that objective the more to markets is else to got So, I that we're XXXX. in some with our Relative a profitability. see slow Obviously, drive would all for to and we've traction, the thus equal, in go. that all wind to get expect in saw Korea, actions market And taken business those you it to is third far, challenging and starting but quarter, to us. we've

We have a strong presence there.

but where has that, there, cost more got starting there's come labor come strategy market a on done, a the It's environment a have not there but just sustainable to too address dynamic structure Korea, We but I it challenging overall healthy very early say talk now. I only there a that to the very, not action to to have going right to And sustainable. challenges we're on progresses. it And said, we're like industry viable partners, more on that. about Clearly, for us, share, our to brand things would and I a there grown that build strong basis in business. and to execute, go-forward think we've to a as get to it's take with to

Ryan Brinkman

all for color. Great. Thanks that

Charles K. Stevens

Yeah.

Operator

Stanley. from Adam Jonas will Morgan come Our the of question line next with

Adam Michael Jonas

one just Thanks, everybody. question I have and follow-up. one

is let's to just shift GM's kind the opportunity GM all deeper but International logic reporting using of does architecture structure, reporting strategic transparency The think of of but of the and this in first strategy? the in of say, purposes, together, signal businesses kind a this Understand non-U.S. of creation. kind on to of, change for the not terms

Charles K. Stevens

Absolutely. Yes.

And is responsibility that businesses. the a GEM reporting under of place for to or external is markets. manifestation, January America all once a X. the markets architecture combination perspective be a advantage presence was is the take now Engle. responsible he in and Obviously, International our Barry GM will manifestation of First these optimize fundamentally, But reporting across in structure responsible to and strategy these is our from of it's reporting the South

as of aspect strategic the a reporting clearly this, strategy. as an well align there's So, to external with

Adam Michael Jonas

Chuck. Thanks, All right.

Mary Teresa Barra

Adam,

Adam Michael Jonas

Yes, Mary?

Mary Teresa Barra

going that cyclical of that look even Chuck just have great said to Engle business up more about America, going in job you was at his add I business. and a to done back South Barry setting team when a what

those definitely right the to together that Barry and is so, business and is benefit, at that to And all be looking of taking and going team leadership looking it. do at a guy

Adam Michael Jonas

you. new Mary, where seem these be entities their they new you, of Thank a new models. tech OEMs creating follow-up auto, for business or Mary. of legal And, to kind kind everywhere future just house

X.X business? seated to back it's But you in that think under speed one you move and the Kind the and I for quickly Mary, up publicly roof would Thanks. whether an separately benefits able tech a to separation that your of or comments being not, in to the tech. in add? addition cons alluded how but cons legal the of the one potentially auto to creating traded pros of entity, kind pros just very what just the speed of of earlier, could are you moment, describe if about I of a

Mary Teresa Barra

Sure.

right the would between technology, what it's enabling quickly. now, and segment I time transparent right have autonomous. on safest is perspective do quick it is when you in shareholder depending already think And But drive when on we'll have we're our clear the is think the that a right value. from best that's it, been the now focus of where at possible focus, to Francisco that it that Corp to and in now. to be where not as I our focus model move IP – amount our I That's And look really The there's is is best Adam, able of now. business the able Warren, and been from on a I mover we're develops And is fact daily why move advantage that's the amount formed, the Israel, what have at money it goes be to first look technology, to keeping it basis think scale. how only we've is us the working think company of to about IP, and we that as separate where develops, reporting is develop on our you on generation, all structure focus and work reporting right but fourth we're Canada the as San as a integration where to deploy not and stunning. together. And our spending

Adam Michael Jonas

Thanks, Mary. I appreciate it.

Operator

And the Tamberrino, Sachs. line David our for from of question the Goldman final will come day

David Tamberrino

Thanks Great. questions our back here. for taking

your maybe know, product recently your just business difference Cruise was or delayed, and a on you Super it I from don't did two and tone just delay half, one, one the years. Cadillacs, the technology released First coming anyone that you that on that What's where putting to else? see you've going been about bullish think to than solution your a or to two AD be year market you're obviously out faster

Mary Teresa Barra

team at important. paying way attention. the delay gated benefiting Super sure of to that of system. safety, has did that the is organization safety. lot because of Cruise, that technologies we of of the the that base core driver a redundancy, learning from which looking Cruise Super was the one There's by critically So, you're monitor went were the Automation is is correct they're into – the make that And Cruise it's we that now we

happening to Super Cruise from learnings work forward-leaning all that had see Cruise on and very that I go so, the then we where that the I those is into how I put – developing, at we I with and ourselves continue as look are all but Cruise. Automation. Cruise at into transferring the be And And learnings the on look there, technology and schedule

David Tamberrino

for you Can residual values quarter in Got mentioned did think then, used in for the from residuals, that? Chuck, it. on pricing? you're And expecting but, I that this the in say fourth GMF last comments elaborate car ones. two you you headwinds

Charles K. Stevens

about, talking much had in the pricing the the it see X% We as the a about manifest itself car headwind the been of year, and to would second half in it used be We year, talked expected year. We've Sure. fundamentally through year-over-year. that in we quarter. didn't third

long. already seen less latter decline think in lower at the the quarter but X% a this that issues of about somewhat And the point time impacted talking going for than second quarter impact part in year, headwind. of I that still by we been see what recovery the perspective. a when the hurricane year-over-year with to with we from the 's and about depreciation year everything and else, that timing all QX think third you we've of is And most the that that starting consistent had

David Tamberrino

In values inventories of of lower you fair. that for your quarter, hurricane? a I the That's did the mean, see a result the September, as again, how of residual your in helped to selling much And, quarter? benefit really as to increased September rate

Charles K. Stevens

if that in quarter, car in delayed quarter anything, third first continue the values to car the the the improvement used question, mark-to-market to as we fourth pricings just see moderate. used the we're in going on see saw I that think First, we

a third we've with say the helped big was else, when unit a there that sales September wouldn't a but probably inventory, absence was question, was million I think reduction your SAAR the everything for of And wouldn't on not the about that There a September headwind. Obviously, GMF as and there the tailwind, there XX.X driver say that the inventory quarter was a of month plan production on about I units of in our overall, So, we a biggest inventory in headwind an was an driver XXX,XXX reduction. of think in you margin, absence the to year a Certainly, results. built forecast of – light second the XX,XXX, relative XX,XXX that. into goes in adjustments.

David Tamberrino

It expenses. my question forecasting. was we lower than Got were then final what it. And on corporate a lot

million be of And gains. for couple going should on think a favorable up slide were the quarter? I Could just elaborate those back you or $XXX not? non-recurring we the what deck mentioned

Unknown Speaker

Yeah.

up million million be will $XXX $XXX the range. We back to going to

to that In that of something that million QX, north $XXX on pace, we talking spend the million AV. within pace $XXX continue to we'll think numbers I importantly, we we've million spent that about. $XXX been reported And QX, movement had that in the of non-recurring to stock PSA and of Primarily, warrants price. some we of part the Peugeot the transaction. biggest in on the benefit gains that. were And the mark-to-market related driver that was the PSA transaction at the

David Tamberrino

Thank Understood. you.

Charles K. Stevens

Yeah.

Operator

now closing Thank for turn conference over you. to her comments. the Barra I'll Mary

Mary Teresa Barra

because to to actions demonstrating speed today. a see future core we're Also, we're the are you hope opportunity we're continue a that going very make I see the mobility. that the to drive disciplined and Well, huge of moving thanks, are EV, and you and profitable everybody. resilient we bold we decisions going I a participating tough appreciate that committed business. personal organization, AD in take in business with to very we invest

intent emissions are on zero industry, industry. and created We we the leading is have congestion future and this of a that vision transformation zero this crashes, zero of we believe the for

in are value as shareholder leadership more the think will we best a and to We you is hear we forward. way long-term and it position generate move

very So, thank you much.

Operator

does and you the lines. We your your that conclude you participation disconnect Ladies gentlemen, for ask for thank conference do that today. and call

General Motors (GM) 24 Oct 172017 Q3 Earnings call transcript