GM - Earnings call transcript Q1 2019 | General Motors Company

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Operator

Ladies and gentlemen, welcome to the General Motors Company First Quarter 2019 Earnings Conference Call.

During the opening remarks, all participants will be in a listen-only mode. After the opening remarks, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded Tuesday, April 30th, 2019. I would now like to turn the conference over to Rocky Gupta, Treasurer and Vice President of Investor Relations.

Rocky Gupta

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

press of Mary the Executive CFO; this materials issued call Suryadevara, via We're release GM's the joined this other Chairman Our call today and and I'm conference Dhivya by also morning broadcasting and are GM's Investor a Vice GM and on executives. President webcast. number Relations Barra, website. available was CEO;

attention your set. direct the to our like turn I'd begin, over Mary page this chart we on the statements the call by to first now Barra. The to the I governed Before forward-looking of will language. call will of be content

Mary Barra

Thanks Rocky good everyone. and morning Thanks for joining.

earlier follows; adjusted capital are on shared billion; outlook as commitment. new ongoing a results. volumes flow clean margin trailing four-quarter trucks of remain QX negative $X.XX; basis. China our year with year. adjusted QX adjusted production transformation our and EBIT cash business that will along billion; in results impacted we full-size vehicle of return XX.X% billion; X.X%; reduced automotive and net EBIT deliver our results invested EPS of diluted was adjusted actions These a full that $X.X our our launches in strong confident was of We are downtime, us seasonality, and line with $XX.X SUV on revenue full-size free $X.X this adjusted Our our help

SUVs, the strength first America. and generated trucks, highest-ever on average in quarter transaction North performance our our prices crossover segments. with We begin Let's of the

followed by crew is a strategy introducing popular mix regular double focused Our cabs. cabs and high-margin richer first models Truck maximizing of on profitability like by X

our helping are among grow share priced every the we also is us truck build. higher selling trucks expense competitors. strategy at of This We

priced the gained this GMC four has models points $XX,XXX. of among example over year share For Sierra percentage

our on were transaction than average model. $X,XXX QX higher outgoing year-over-year all-new prices our nearly cabs light-duty addition In crew

Our truck launch continues to be well-positioned forward. moving

pickups and second reach sales the optimal and Silverado GMC second typically These are light-duty customers We truck styles half expect Sierra an introduce in XXXX of the of will industry when Chevrolet we our cab light-duty popular are mix and supplies sales year very will surging, with adjacent quarter. they our heavy-duty In of contribute to pickups. pickups. the of trims commercial

a As crew previously mix Flint demand, expected meet announced, to higher profit strong in represent and opportunity. will higher build cab increase of capacity a we growth styles that heavy-duty trims to

launch leadership. address to in vehicles our electric are addition track for with now build on the media with to battery industry we of coverage In full-size partnerships And downtime our around upcoming various behind mind trucks. I on that truck We SUV the and us. planned intend want

when competitively an GM pickups. future we full-size of not know franchise front. additional truck our leadership appropriate. all-electric industry-leading includes feed range I an will industry-leading We you information electrification will share EVs either we to As create and capability. intend complete And including has assure a that you on

which Moving SUV sale on Cadillac all-new and this to later We our XTX goes crossover the introduced performance. year. on

Chevrolet We up I accepted than achieved share hourly but segment-leading XX% shift transfers to like second jobs our Acadia have the progress more ever we relocation year-over-year. business toward offering quarter actions, GMC want Dhivya all two-thirds week Equinox on our Buick about transformation will high-demand growth Enclave the where This add are and brand-new trucks, encouraged The our crossovers, facility. already X,XXX to you announced employees vehicles. and next-generation of supporting Corvette opportunities update at Trax last of a Bowling records. plants. best just its the Green, plants customers And at XXX are to other for XTX we sales and our sales QX our Kentucky are includes and Cadillac will brand. that to set jobs employees are the to unallocated segments the impacted available more There X,XXX and

we translate believed our quarter in international discussion In to being is there to the because income equity finalized pressures. this of volumes -- flat. industry and than believe would in Motors tailwinds creating expected with our in half specific the demand stimulus risk we need launches. believe the vehicle ongoing Moving the operations, nothing the this industry be January, that General stated lower China, well we in shared that in for long-term. as And the will we earlier and into autos. is downside the And roughly But we continue year, see for due second We related positioned how uncertainty We details upside we more the to to see final are to near-term. to we

new strong advantage. our vehicles a to and Our distinct continues and be of brands favorable mix partnerships

July Cadillac's strength we Cadillac sedan have concessions in over $X.X later the us China nearly been In XTX to and year. of a Tracker the new global our These South to that working investments in of the our Onix, in It with went enable invest expect weeks five viable Brazil. position family. to refreshed Encore, capital plan. sale Chevrolet forward Recently, underlying stakeholders a later generate facilities Chevrolet a our next we leading is joined in from sedan strengthen will build May our all-new challenging were at continue. family with Buick the overall by new contemplated first from two in models The we an this vehicles, portfolio and will future facilities these two from years all in billion we be to meaningful stakeholders received returns at Brazil. Because environment. XTX see appropriate the now path this all-new on ago. we updating And its two America, Chevrolet will in crossovers CTX

second with the our build creating Michigan, along when jobs model in at battery-electric EV, Assembly mobility announced quarter facility Bolt to our this we Turning future Orion launched. we new Chevrolet initiatives, that XXX will a

doubling Cruise work to hire employees X,XXX its Cruise GM this we year, while On AV. the as vehicle self-driving safely deploy workforce front,

to the full-size typical we So we seasonality, quarter, China. expected the downtime, given in SUV industry recap delivered pressures and results

will turn of And for I transformation to Dhivya, to Barry do new want continue I Engle, leadership and proven it roles and senior all over they position their leaders recognize They part the began Before Gerald this long-term our Blissett. team as Johnson a Julian success. are company that help month. our

Now let over turn me Dhivya. it

Dhivya Suryadevara

pickup Sierra and expectations, the transformation line everybody. favorable prepare some results in SUVs. in results of seasonality, our from of our review solid morning we headwinds. delivered With good the of with first these impact traditional full-size QX launch volumes as and actions more strong face downtime all-new for and our Silverado Mary as performance offset in of quarter China lower We XXXX Thanks in the that, detail. The trucks, and let's we

As adjusted $X.XX and $XX.X The billion Mary $X.X flow. adjusted revaluations. adjusted, of EBIT in we net automotive in includes generated benefit mentioned $X.XX $X.X EPS-diluted $X.XX X.X% in QX free and PSA from a results margin, adjusted billion Lyft billion in cash EPS-diluted negative revenue, a

expectations. QX year. the cash core consistent earlier automotive Excluding our billion these performance normal outlook this of $X.X with seasonality and burn was flow provided in cash with items, of the reflects the The solid line and impact is

of strong, billion these partially full-size and The cabs, North X.X% depreciation mature downtime despite, EBIT during and to SUVs, America. been offset exceptionally our headwinds. income, delivered turn headwinds. from savings to Sierra North increased and actions price our of lower favorably cost Let's transformation $X.X performance and volume, it the and all-new and quarter. margins contributed light-duty Silverado commodity trucks has adjusted of mix strong launch crew performance America our pension for The light-duty

pipelines cab -- powertrain traditional focused these the Mary to new disciplined capacity, architectures, profitability. and is our With the incentives from and We're our mentioned variants. strong on on our transition high-feature trucks. As remain ATPs, launch disciplined. and not constraint from filled seeing released strategy new cab we growing high-content the trucks maximizing with We're old crew

this the all-new ever, to powerful of a XX-speed as towing for transmission Duramax Allison in upside strongest with engine lower-price diesel most share see heavy-duty a for at our later increase opportunity as launch heavy-duty expect class-leading the markets additional from automatic year, the normalizes. mix We capabilities. the featuring We capable segments we

a Our crossovers and contributor also to performed were profitability. well positive year-over-year share in the gaining quarter, market

Let's GM International. move to

in For opportunities with efficiencies. Korea. for by year-over-year, in of such China by as The mitigate finding industry lower focus million, a partially headwinds. the offset actions EBIT-adjusted income on to and business year-over-year, an impact down GMI growth partially result first to quarter, was $XXX million due team down equity China, equity pricing was in manage adjacencies pressure, cost and restructuring $XXX in volumes other cost of in to China favorable intense $XXX quarter the the as million continues lower the income offset

We right-size by have been by production year-over-year. our taking actions inventories in to in QX XX% almost reducing China,

work A These generating and to second launches the were a make America, introduction Brazil on our new invest and XXXX. help We we've GM Corp had pricing working costs. of continued state of market and Paulo, material towards South global historic this returns in suppliers acceptable volatility. posted Brazil negotiations the reducing family the half leading us coupled the revenue our to Financial, in continue next up despite comments the great increasing with since the on the on with offset share progress five vehicles Cruise its saw São million, of segment. macro of first nearly actions actions, a turnaround $X.X to region, as and taxes share of that business. value Argentina, in our pressures. ramp billion Financial billion In indirect our GM allows will and record the the retail quarter costs reducing and result of an few move through expected best years, dealers all-time agreement year costs, growth with we sales in labor the for We of well as inventory as quarter EBT-adjusted unions in hiring. by our negotiated continue a and residual while Cruise we the $XXX us QX portfolio as with XX million production year In franchise through will and quarterly $X.X XXXX. continue off over $XXX in

in $XXX up Corp our $X agreement. a million XXXX, headcount. haircut $XXX applying segment million from million, lock-up liquidity in approximately to the Lyft as after spend to reflect PSA revaluation, first in quarter billion including to $XXX segment expect year-over-year our income the favorable we and impact We six-month increase approximately warrants Cruise due was

Corp spend continue be segment sorry, in -- QX We in to the billion underlying expect in $X to XXXX. the about

wanted year. close, calendar for to I the outlook Before I reiterate our

$X.XX of of range to $X automotive to continue the in to We strong XXXX EPS-diluted $X the adjusted in flow $X.X range cash and expect billion adjusted in free billion.

of some China, As I've income will moderately including of headwinds to face tune billion $X headwinds billion. commodities we mentioned and tariffs and from in depreciation $X approximately the equity about pension and are including meaningful Offsetting headwinds, family the and before, global of and truck launch, number vehicles. these tailwinds, of Cadillac Blazer rollout Cadillac our of from XTX, Chevrolet our full XTX a benefit year a of the lower benefit

expect $X cost to continue to billion also billion We XXXX. $X.X of through savings transformational

We have cost savings on progress made the significant to-date initiative.

XXXX front-end we loaded, savings a achieve the significant of the savings starting QX. expect in portion With to

the year rate the percentage to Our XX in for XX assumption tax range. effective remains

the rewind flow year well achieve of Financial. to through team partial We dividends cash full GM China of free outlook earnings the improving balance flow expect and cash year, through as from as a quality and This of conversion. our committed free EBIT is strong working capital to performance,

By is volumes the in lower to last Regarding the of weeks cadence the in took year-over-year heavy-duty the are due expected flat downtime be first heavy-duty China. downtime a downtime SUV and preparation second for to to of launch. the similar amount year quarter, pickup as will the weakest year, we in our quarter. take full seasonality, third quarter quarterly In expected we be full-size in XXXX, three volumes

be to As inventory QX, we income expect in additional in China weaker. we sequentially take actions equity

well the China, expect second as we in meaningfully be address and the of solid of stronger, downtime our QX comments, perspective. performance opening us of as strong year. in In summary, flow call. to from concludes half well As to the up to cash both we now move sets Q&A we'll inventory free and had we and North an performance cycle for in past That rest portion the it for actions America the the EBIT year

Operator

comes Your of Instructions] the Rod [Operator Wolfe question first Lache from line with Research.

Rod Lache

morning, Good everybody.

Mary Barra

Good morning.

Rod Lache

hoping now QX China. QX you inventory that on But correction a was or were bit year On the One inventory. we not of little brackets expecting us look mentioned had the a talking be if you sequentially parameters profitability be might would on be of sort these about continuing is I give that of weaker. your It's worked some the I the just as better. able QX and you couple underlying similar to how business? call, What's to magnitude you adjustments QX you're correcting it's and questions. inventory. be obviously to to into what's of around should

Mary Barra

Well, is Rod. Mary. This

for doesn't I customers. get of Because That's see now the finalized. think There's It some volatility. key get a I happening creating a mean, stimulus really lot what you, what's of mentioned we lot it's measures. stability something all I is from uncertainty about. right that talked of you

holding year. decisions to made volume. are shoots a There in of because think GM-specific have that's observing. in the for some part the for very -- I'll And what's looking think to is China we're be part So second we volatility second important coming then we're we say number get that launches green resolved of is back and that I

in even QX. them of some started And

what So bracket perspective. industry an put of to it's it's around when to hard issue the consumer around stimulus it for a Motors giving expect a from General confidence

Dhivya Suryadevara

a And launch have point, typically, In we a could do higher add of data level if costs. I QX Rod.

XXXX, $XXX by So you we launch million were in saw additional QX that impacted costs. of about

yet XX% to driven production out inventory be still will year-over-year And rest from path launches we we that do making Mary Mary do to perspective. work rightsizing of in QX actions and in And year. by as an stripping mentioned did So see progress as a is there the mentioned. there QX of year take the this

Rod Lache

Okay.

correction QX? profitability inventory the I underlying Excluding occurred So during would that? there excluding an the better correction mean that was be inventory

Dhivya Suryadevara

were at end it QX. We in there in yet the of there address so did do actions XXXX the QX inventory actions production to I were we of QX had we taken flat beyond that flattish inventory what mentioned. -- of because China seen versus work that volatility of more yes, the And dealer have XXXX. that is XX% to And

Rod Lache

pretty switch been point the to revenue just truck new you Can one $X pickup was that's about still talked case. the billion There's At been a performance and if market you and the upside on some regular a obviously platform, your now cabs. far low in bit objective? transitioning so of inventory share What's double the volatility status you've since that with a of rollout? wondering

Dhivya Suryadevara

Yes.

$X points So billion time. the if back at made few think you there were we at that a

we percentage Firstly, the below-industry we at from penetration the TX able cab to to with constrained over XX that were a our so increase crew was running cab perspective. capacity were crew crew release we And and a constraint, KX able in points. cab that were averages from by standpoint architecture, our

line opportunity flow in from in of So that cab much in some through huge QX that's mix. that XXXX as And seeing opportunity. seeing. as XXXX revenue about of of additional well talked the crew as very us headwinds are was the We're you're helped offset we that frankly a QX we the and driver revenue

couple tailwinds In of addition we already to thousands versus by tens were as the increase that we that in. capacity the increases have opportunity able we a units Rod, $X capacity was in of factored KX billion. standpoint do And and light-duty that few built to that from TX revenue into of drove had well

track billion between we crew mix opportunity. additional revenue for are cab capacity $X the the So on the and

Rod Lache

to Whatever $X.X in a happens cash pretty would since dividends $X one, affect you Great. wouldn't come the China next a year flow. free that this billion this. range. And range quick just broad of year obviously billion in It's gave one last from

drive you evolving? that What end end do would of the see or how that or high the are So that factors forecast? low the upside

Dhivya Suryadevara

an that to EPS say the part we Obviously fact $X.XX $X. of have I'd Yeah. two that by is driven range of things.

that of as we're billion and capital. drive year. in to to $XXX you know taking that volatility typically And the and working actions every So with downtime that production there's flows business Rod have commercial comes And capital-intensive in in earnings out tends addition happening on it's depending that. and range that single we timing natural a well of working

the typically say, earnings-driven that seasonality would I So drives its range cash capital working flow range. plus the

Rod Lache

Thank Great. Okay. you.

Operator

Your next question Michaeli Itay comes from of Citi. the line with

Itay Michaeli

Great. Thank you. morning. Good

GMNA Just walk. this XX can – on slide you on tell the us what was

the material I cost for of the quarter offset pricing. the majors This noticed that majors

I few think next you you relationship Can the about that few the twin the factors there last you about were talk in how positive quarters and think that. quarters? on

Dhivya Suryadevara

Yeah.

on majors are Mary on front. more instance say the of flat think two typically TX it in life how by D&A a better back to variable were and the you on truck-to-truck between point from as a about It of KXs. that on that, a to the truck. Obviously, basis life-cycle-to-life-cycle we EBIT of upside indicative. light-duty cab is material it from that's truck basis. higher a the TX coming I versus a at generally QX. ATPs sort these mix pricing look from the compared I comparable obviously command overall get and added is leading overall profitability average the quarter-to-quarter the perspective the So through lot entire way step But that's an say cycle talked majors a one to quarter noise. for on I And would able trucks a are that year-over-year. perspective offset standpoint But the QX the KX significantly about The were volume and vehicle. like-for-like some about. to truck content there's between our will in And I trucks from take data price EBIT perhaps and there's profit higher mentioned think light-duty for crew in would Itay would not

Itay Michaeli

That's very Dhivya. on question Cruise AV. Thanks, just helpful. And just then second

Just deploy love the it by Cruise quarter how in in was for there. the of to previous progress get timetable the update relative the to your expectation to an to try Just end first year?

Mary Barra

Sure.

we back. to step think I First have

and pleased as challenge this we We engineering our position lifetime. with at very our the of are look greatest

unlock You will happen when multitrillion-dollar we market look at the benefits to mention not societal the that this potential.

that a it way way doing and we rate iteration, in from then really in only wouldn't it approach the at the else. our position our our and that of attacking think anyone the are integrated this continued one this doing perspective look I I and when fully I with improvement trade

the made have to We to a remarkable we've goals to team motivate date. as in as I work and fast set think for them aggressive possible – progress

we're expect we looking in at the safety. And that's maintain the position will And So we to we're gated will this. now. how be leadership be by Safety priority.

Itay Michaeli

very very That's much. helpful. you Thank

Operator

Your with of next the America Murphy Bank question Merrill John comes line from of Lynch.

John Murphy

Good morning, everybody.

on or question as excludes think people correct? basis the range guide as if zero those assume that this on in Because would with think correct? first potential there's outlook think some think or Is at looking some $X.XX confusion range. that that to included. a that I $X I about from it $X.XX we down year-over-year that will of you in because any Lyft a market. the Is Meaning that revaluation there's $X.XX $X Just PSA to And warrants. the

Dhivya Suryadevara

in that correct. will. X assuming of we're $X.XX $X you outlook. profits is performance revaluation our if to operating in tailwinds There That or That's core is terms

John Murphy

Got it.

would think the of that's basis create cadence range how specifically and $X.XX $X.XX in that if first just get we year. into I in $X.XX just it, ask -- about trying quarters three but operating the apologize you gets And $X of if $X.X normally question second realize the EPS us of that's fourth in to the or about quickly. to But we we billion range, product seasonalize Okay. a on will cost think that there much that if quarter? If think it at and quarter, of look a then you saves kind a to the kind the quarter But I'm be the understand was third question. billion the some upside. in you essentially launching first simple incremental and given that saves roughly $X about on would the cost second, you'll $X.X run of and nothing rate if a

Dhivya Suryadevara

Sure.

in first do transformational roughly out of item line those pointed in in our bridge, $XXX favorable. savings point, ramping in quarter So performance/timing worth John, $X QX. QX. anticipate more that million that your To billion our I in that QX, up through we and there flowed Within say, QX cost the was we would about

to the We $X number as I'd front-end close in than track But So well. being And to a back QX in remain stronger getting earnings run year pretty it's up $X.XX of performance billion, are calendar the on end million number on what billion on call $XXX is cadence, the in run and there's driving to HX loaded you'll it rate since achieving a question that of $X.X rate your for factors then that. January. HX billion performance. step that taking outlined

expecting truck we the full-size once the QX, you're higher that Importantly, in will to our of we're for think the HX units I rest SUVs flat calendar going about what's the forecast. we're truck talked year, that number units taken, reverse be whole XX,XXX And heavy still production And downtime if downtime of going than we're have not And see itself. already which downtime means to SUV HD duty that's the QX. you in expecting HX for is took about that production. downtime the year. for in Obviously,

those that that as an you the and ramping and as When that launches QX perspective in QX, action XTX mentioned that an very put transformational Hopefully, this us driven to together that more the I which So gives Blazer tailwinds. think that's helpful. $X up that I from as is cost we are actions about was QX as factor with plan. important the well guidance cadence. much you in all very are -- QX achieve ability items cadence laid talked specific that's confidence out of our by that's bakes $X.XX to in that. in have And acting about And

John Murphy

That's think wondering mean, but if positioning so second with currently I very quick two positioning quick. just the I’d current you the was helpful. And one I I just ones HD capacity, be then meant, But or in of of dimension are the you where is the going year. half in could currently what that sort you where sort think of the capacity and you is in and

Just be kind or step-up whether that of maybe numbers might change in or you some to in able numbers think we understand it you in the so HD ATPs the the business. just capacity be can achieve the ATPs

Dhivya Suryadevara

we light-duty perspective added Yes. KX, LDs. heavy-duty Frankly, capacity. were Between from TX than we're HD we an and some more capacity constrained and some

about a expect just we And the units that. launch will from So in of mentioned, there's typically, the -- this to obviously, from this benefit units perspective it's believe of XX,XXX will in LD price to exceptionally strong. perspective the we KX. -- transaction we and the And from that we significant just come quality itself perspective. XX,XXX early as and the an is we you -- a added From think going truck. prices do from be see HD the for lift when vehicle prices Transaction TX transaction comparing

John Murphy

do think goes? you lastly really and just that GM Financial year expectation quickly. for dividend And where your what's this

Dhivya Suryadevara

is GM year-over-year. The Financial expectation dividend flat current

is of of expectations. got But may a year upside how We're outlook going as earning outlook our to see out residual there's $XXX from to our to pan You have million. flat standpoint baked that. if last into leverage they see million now value any we and their and to assets $XXX recall

John Murphy

very much. Thank Great. you

Rocky Gupta

Sure.

Operator

comes from of the Stanley. question next line Jonas Morgan with Your Adam

Adam Jonas

Thanks everybody.

Clearly, I get? go then or truck is and from mean terms and It I looking -- is you truck ahead own your demand guess don't call kind versus better of if can that subscribe ATPs has there the and peak question hold supply whether trucks. footprint room many full-size that of environment. can in as genuinely and many this outstripped on this industry strikes maybe strong into how on you truck. competitors further your moving we're First on a of demand you pushing this competitors, very I supply. peak is you for hearing significant very, whether to to that the look mix think think you your much in do XXXX. this know you know HD

Dhivya Suryadevara

Yes, Adam that. it's shot at I Dhivya. will take a

You have you versus we truck store. about that different quite heard that talk the believe how the at us market overall look when is

the perspective. point about where The a XX% point years. because strength sort the a use to the base market. age as you've mentioned cited And growing at that cases we overall from customers last penetration seen that the are distinct own reasons have like bullish -- the fundamentals is our the franchise. positioning the than fundamentals it commercial the installed growing, how our a age with we're are based truck standpoint. data see average you've we're of for do talk I about We our us using of the average several is the in flat of launches truck of within truck well new vehicle as as industry at pace and And faster well very a continuing over that, We light personal purposes. overall on heard from and TX And overall are bullish of

Adam Jonas

Okay.

Sounds like not truck. peak

question second on cost The savings.

gift environment let's pretty any we're that sake just mix more the giving the but that global awesome. isn't production's keeps if on discussion an in of it's say for So, can plateauing, China truck where grind higher,

a content and me that structural strikes you in you examples My delta to at again talk some combustion attacking I'm are -- got that -- burden. costs electronics attack point doing be get you suppliers the are may as all costs purchase around architecture Can competitors in XX% all Germany of to huge talking share that opportunity you the Thanks. start been your the mean last folks year. savings real is to electronics. can costs a all costs. to of you example costs your stop? some internal attack that I It electric maybe high, can arm. the your design very you saying and new materials? proactive of get So, at And to their work margin from tweaks to architectures the maybe there of taking the have that can some can to -- pitch factories? announced profits where instead antiquated you attack you you're not but for and to bill through in isn't just in and tweaks you the electromechanical of So, hard well late the that -- costs to question your you've measures

Mary Barra

Adam think where it's continuing in of did see that with we up very are the pieces we're globe out make work culture to material sure down. cost efficiencies something in on have be them the a permanent. contenting. a also that in it's It's cost are on those suppliers every that downs their And Complexity take efficiency drive around something We're United region all working you'll of reductions I also States. initiatives and with it that so they are point. actually the in costs to is focused the important work cost Yes. -- And America specific in that. China we first single we're in but to -- quarter really the South some the party came

and efficient you the suppliers. to do Looking most involved in exactly a General do relationship do work today getting last them his early several definitely complexity how suppliers on we with battle. Because over they because customers our -- Motors really by their well are want Kiefer look design very want in really focus constant our take fact and years with give the get suppliers so a we that it out way. a customer and on the we built looking but cost want to I'm encouraged driving want that with ideas reduction and Steve you efficiencies, instead team as the driving to strong you is what very has And what something innovation, effort the at of at focused best the if at it's our phase as

initiatives running the are company. are those across that So,

presidents responsible We projects report vice a they it basis. have regular on for and assigned out

energy. it a we're So, bit with attacking completely of quite agree and

Adam Jonas

sure Thanks you Mary. I'm everybody. will

Operator

Markets. comes Your line Joseph the RBC Capital question next Spak with of from

Joseph Spak

Thanks. the Good from be recognized clear, transformation to that -- the morning on that everyone. some in Dhivya thanks GMI? billing that's of that for the you you in savings is also excludes that I recognized the in -- the want quarter. color just Korea savings

Dhivya Suryadevara

million $XXX in is that does exclude the which The billion referenced, That's Korean $X embedded I'd our right. restructuring.

of Joe laid apples-to-apples, to end that And the I that the think is billion we we have million. billion the would year, that $XXX the achieved So this we achieve out portion by said about XXXX. QX for going were billion of we in $X.X $X.X is that that to the $X have

Joseph Spak

Okay.

was the I So results we GMNA then $XXX that's where and look for it was the you -- and then million. that think just then at if --

and $XXX So that the $XXX you ramps year? and savings basically million go that transformation through the as that is million

Dhivya Suryadevara

most of of and rate $XXX run other are the one as neither is another quarters. GMNA I would getting that after which up million say timing roughly that And comparing There's savings. regions -- you're a accrue ends the Obviously well. quarter related. of to the half some There's and Yeah. other quarter,

noise So there's there. some in

Joseph Spak

Right.

if commodity I the this, sorry And but year? any change missed outlook for to the

Dhivya Suryadevara

tariffs. palladium the that backing of said few guys plays year and tariffs. delay headwinds well baking could $X still as We're earlier overall it and as are see obviously, out. as also we that bit environment Joe update to And, billion There's how aluminum see as relates little TX on standpoint. the would commodities in some up tariff items steel we environment from in $X had a We will this a changes, from a headwind There's the you we some that. And billion. the tailwinds,

Joseph Spak

quarter provide and income mentioned down wholesales the margin to sequential we the the but And were like think Okay. benefit some big XX%, the what fourth any you If And really some some could that detail decline? and adjacencies. work higher mentioned you also I despite more maybe drove as the compare But to then just China. income quickly from JV was of up. net income you just versus back of

Mary Barra

And about actions add. as Well, -- $XXX helping inventory, I of million. well that the adjacencies say there's size cost that I'd as to QX are specific taken Mary launch right did we've mentioned nothing actions to have cost The the mentioned.

We that's there's more and are an intensely even focused increased on happening effort China. given in China environment cost market standpoint a from the been

continuing out -- QX impact on say see you'll than in as I to work and would that just inventory QX in into So and that playing other well.

Joseph Spak

you. Thank Okay.

Operator

from Goldman Sachs. next David the question of line comes Tamberrino Your with

David Tamberrino

Yeah, great.

it both refreshed pickup quarter. back to America your head And and of there's right the talk yourselves it's tactically inventory just already Let's about first from two in of one just their -- that a and competitors. competitors now Within main like seems segment North lot your product trucks.

guys You shared owners. were

the third half back a mid-cycle You're And with your they refreshing competitor for then as well. a are but you'll coming. heavy-duty have refresh

share where to come heads about with going to Just thinking net that supply. little competing our seems you're -- for just is market more GM your have to trying bit a the market how certainly return around wrap and the

Dhivya Suryadevara

QX, year-over-year. to insight out see the from I'd out. rolled already the up the areas And say seeing look taken get actually I XX% early out, from it's four the a share. rest as rolled well standpoint Well, gains share seeing through as trucks can regular think pointed points you share its And just cabs. in HD. cabs have Crew we've transition. I work we And still diesel what where we're to you're mix are launch of We're Yeah noise you see in already to as going Sierra in. the look normalized mentioned you Mary that see before percentage the got And as cabs, we're during has a the crew going innings if perspective. we're go we coming at of as from

David Tamberrino

Okay.

that your the XQ which have then more share and you point through as see gains double where back you'll in HD is normalized get you'll being regular the cabs, So launching, the half? and maybe finish cabs the quarter

Dhivya Suryadevara

Yeah.

assumption. obviously, a yet the still days we're rolling feeling And, as but tailwinds variants a perspective. we out in early other I share are think from April fair that's

Mary Barra

seeing I the even growth mean start we second as -- go just overall, in of we into we the quarter. are David

confident there mix And in rightful the So get share. the as competing expect have truck. all out across we're are Dhivya we and segments, said when our to full we

David Tamberrino

think maybe a come than weaker little the X% Or better? X% assumed expected? then those had something still down perspective, values, GMF year. worse residual of in you're you I on Understood. seeing little the And that the case? you Is did for the a

Dhivya Suryadevara

you were year-over-year. down value in if about decline still anticipating QX Residual and our to X% values was performance, with look it the QX the at we're X% And X% expectations. residual for in actually line

some and GMF it's to items had In standpoint. puts QX from a You XXXX, important one-time takes. we had note some of

market, plan. got in some look the be then -- residual you you asset fund So, We this growth we -- which well credit margin it's -- interest go and unsecured net -- headwinds funding our pressures And and asset note the on comparison. out the not value perspective. are important is and early about, growth growth our interest plan And I that's in that an against up also it's that. as to apples-to-apples as plan as year our lumpy. our to per We to did that causing unsecured as revenue that in to talked well the in an at raise from if tends you have our pressures catches earning GMF, ahead

versus normalize the together, flat year-over-year quarters. that you So you see XXXX. roll other will And see a all XXXX we this in

David Tamberrino

it. got Okay. I

anticipated will negated that worse worse get So the as -- be prefunded grow though even the year interest headwind your cost throughout get balance somewhat residual to sheet? you you or values will

Dhivya Suryadevara

Yeah.

David Tamberrino

that or more bit little a a update? then we've year got we expect it timing, I as is and Cruise November update know you maybe Day asked lastly, when for earlier any from And half to perspective. since one Investor on don't further now thinking of unveil on maybe But Because Okay. Cruise. about a had think an a update there I can on

Mary Barra

Yeah.

later very pleased I this think just rate updates and you'll progress. And at an -- from we're a continuing see again, from year. we where of are with overall,

the think important to we're underestimate is how I deep integration it doing. many that use

don't the doing in our have takes changed of fact States. Let of we're XX% components that the to it we safety in vehicle one a the you testing along understanding in what me driver systems have most in everybody with the the remind have environments complex true the United that vehicle when

gives put you us that's what when so position. very got we've a And that together that confidence strong

advance is externally winning I if -- it. have And I look a this that's monitor you record. just They're will. they mean, to to at want and look is and launch don't, safety start. example because safety remind There multitrillion-dollar we potential. that so we If develop they a of great awards we everybody to the such feedback the capability But to very standards much in have to down a recognized being to and without we're vehicle, what We the be our a driver technology continue other do. we’re is create that the also can launched technologies Super Super is one able have market Cruise. customer the it markets more -- also from strong think I we take going And to in feature. all do still that's once lot of from vehicle to costs is that we disappointed it's Cruise the if to

we're and see We which us. is opportunity. will on critical. think the So way technology that We huge path in a the safety developing gate this we're

David Tamberrino

Appreciate Okay. the Look to Mary. forward Dhivya. you, all, Thank update.

Operator

question from the of Ryan JPMorgan. line comes next with Your Brinkman

Ryan Brinkman

front? you that there provide would being the on Hi. America When relayed announced but an were disclosed it taking unnamed Five my in time, restructuring in were Good plants can seven close. actions Is transformation update facilities. international which morning. question. for was GM I International at think the two being North Thanks November,

thought definitive reduce place taken action You've about we've you capacity. in really the looking China Korea. to isn't

updated your footprint breakeven? might you're of next America? focus And to And IO South how consolidated to with would actions? actions you as regards in progressing we when the about South on restructuring be reach thoughts think any So your should say able America

Mary Barra

to though, I just from that don't details tell on a I would So is anything plans are at you to still any provide. underway. everything the don't have but have transformation well We announce International time more track. GM

Ryan Brinkman

How the Okay. we roll XX that Thanks. was maybe relates should a structural more driver or cost up at you appendix, transient timing-related slide $XXX to of And of can million think factors like tailwind proportion that into factors then transformation in that tailwind? some factors? talk the performance/timing the looking about the that about

Dhivya Suryadevara

about I half. would half say and

flow as rolling you company $XXX through. say, dynamic, and into this was seeing Ryan, million billion so actions, the roughly starting The through benefit transformational as that's If we could timing you're in at perspective, that, transient, GM bulk and the we say, North so, a timing. -- half technical Of million half savings -- that timing. Half the say, just From company And $XXX North a of right? typically America. it, can't in think that of you what continuing. you $XXX I a America, year from and explained for I take million $X a North or think would is total achieve every look material I remaining had I perspective, the would same I'd performance half cost of America, that and commercial standpoint. from to company

Ryan Brinkman

very launch investor profit observing just been from increased that profitability your served different relative launch market It the questions over cetera. trucks, front relative America nuance terms make then, maybe and lot so perspective. but of full-size pricing some the truck about there's attention counterpoints maybe share the emphasizing lastly, there's if GM availability quarter, you relative and question, has this perhaps of you're how to disciplined. a a too volume. to with And market during in trim of a Okay. There well North media -- you pickup price far. of in was already, just if on the sort volume parse some of to levels, Can would et share of But thinking any out been

Mary Barra

Yes.

in are is and I in launch We're think, going the extremely at as launch look it, you well. transition. we

before, the we we're already a started and seeing mix performance in crew As richer said we've with cabs.

and And that's think performance be quarter look the for so, first you the that's going that year. at think, I can't to the

entire we'll through Dhivya to round mentioned, us volumes. year, in go will lineup. not opportunities the heavy-duty out give the opportunities the mention As opportunities, additional That as the we in trucks,

we I appropriately be overall and phases will to launching market appropriately. where a the well middle from track has think should representation the going this of We're But focused in mix. way truck. our respond launched have And to of do in all profitable we're be to we disciplined a an very disciplined But been to and we've understand thought-through we're -- sure it positioning we've the the do plan share end but we we So market and really, strong it. well. got of highly as just perspective we that fashion. and that be maximize And the make on truck and profits really we should we're on we a from think,

Ryan Brinkman

it. Thank That’s you.

Operator

from of Barclays line comes question Brian next Capital. with Your the Johnson

Brian Johnson

the crew in two into pricing a the mix versus cab waterfall? materials a pickups that the XXX questions; is waterfall have or higher housekeeping for on I put the cab, for Hi. to crew pricing kind then you Mary. question Dhivya, of of Back broader one question do again costs, the XXX and

Dhivya Suryadevara

the mix to Well, you to a higher well, is, will that not both. took as the The it bucket, of the year-over-year, it's was being seeing percentage see mix negative which offset we you're full-size reason this the extent benefit in that -- by have downtime time crew Brian. we SUV cabs really mix the And that is mix.

on by the So mix cost that see that in increase reality as material in in a actually price it's positive number dynamic what at you the price And well, extent bucket that's an majors see you'll And there's offset the bucket. happening. the to in the aspect that's look to price, flat, downtime the with is that was. but being conjunction

Brian Johnson

of from a in on But just kind design, look Mary. I the we've at accountability, the did profit. drive to the they of change investors the you're do view, is, thing vehicles, if you. geographies both over some Thank the question have speaking, it greater and you pizzazz hear at cost people's the the years about interiors, mean, GM a product broadly I and GM one advertising doesn't, in And talked right focus sure cultural Okay. for making don't Tesla, some FILE of just kind I it's Elon's as their might it's as created like some the of of Elon's see. advertising us back us always might but vehicle designer to but I the lineup. have one like doesn't, Tesla, going designer people's back your always that one on some their you it your not lost created in not lineup. don't that going see. on of vehicle view, lost pizzazz to you

about to So on design overall just, move would you differentiator? the how what an capable profit of vehicles are important, more out you important important more to get to the Is next And the it kind at is thinking it are what game? the more trying do you it's state Or and to do of think GM? you play of it it -- level? cost kind if there and

Mary Barra

important. incredibly it's think I

of is to do this in design a market. important it. win to everything You And piece very have

view and very for, is customers the and a than understand Chevrolet have in a compact we SUV Cadillac Full-size process disciplined they're think truck how different the is I products. like data than Equinox. looking clinic a we where they segment different what

rigorous trucks process aspects do develop those how And But so, on customer we really and important. designs. the critically we we have all at as a putting the are very on focus center

think mentioned as advertising you I well. you if --

strengthening successful. you across metrics. brand I would has of there's look been the all very, from tremendous that the as can with key very brand Cadillac good at right telling made. And shift also is job had brands really we've a our think you've do campaign list Steve of been and say, that we've when seen Cruise, Carlisle And the but you, example better I improvement the a building, with

to advertising efficiency affordability products and So and the marketplace and that the the effective the and sometimes want then beautifully having that and all we're right to have have But is most one focused desire breaks that the isn't the got customer contenting, and so wins having package we advertising people right with winning that for and the through. having designed through on could the customers awards. breaks

Brian Johnson

discipline apple and things, groups. to sort talked back just about process. how they But And I off you you focus until create things the the it? -- wanted mean room they saw didn't and people design classic know of wall the do enough for creativity

Mary Barra

to not that process base, Cruise exactly there's advanced company even certain not things company But if designer participate we that. the design design, the relates product I we're we base, can every a the the interesting a ideas think Well, design And do try putting to that it there's the for we where -- but designer almost a feedback input. customers. product, the And of getting one is is brand, in on Brian any as but responsible as team we provide allow in that's certain there's in on new forward. Super to technology from start a

Tailgate. we through workforce the our manufacturing in and way So GMC the That's of great And coming that's creativity part innovation say shops. the from I came team work from MultiPro truck. of is of innovation every that example the member the would there. and our another GM

where innovation have participate. we So an process everybody can

in then chief I'd about talked competitions past; kind also it and of they creative have when of necessarily designers the Shark over an commitment in not of the into are what I've their the to and we production. call ideas. company approve is from panel people have their the where bring Tank engineers Synapse put we in think And all actually I that organized area version work, idea our own with

couple how and of of So put I've both examples it Motors of encourage talent in General we've enable processes capitalize entire happen a and we're can us. the to it place working you and on just team. then incredible given hard to a innovation the

Brian Johnson

thanks. Okay,

Operator

Colin Your UBS. last from line the with of Langan question comes

Colin Langan

question. for cadence taking thanks can are first, just my all Great, my just sure I just the make recap the Maybe right. want facts guidance? we

will than second first The is half. be the half stronger QX the weakest.

the excluding of PSA. downtime? about QX, be slightly know you there the number and a So on in give sure for better that And I Lyft I'm will it SUVs. number did means QX QX was downtime the Is not of mark-to-market a XX,XXX heavy-duty?

Dhivya Suryadevara

Yeah.

HX, the So both by for your cadence will than QX be a driven QX is standpoint, But stronger weakest. from QX first question and than QX is and QX, downtime. better QX primarily QX.

in our fact we Silao take which absence As you QX. offset by have did that standpoint, in duties full-size in light saw, of you SUVs. well. XX,XXX we probably a And QX XX,XXX that full-size in the from a well for of in as light will in you quarter units down of week our But the downtime SUVs roughly as we're downtime going duties, HD about as think units plant absence have second to took downtime be as

that say volumes the the Both driven actions. about before is well I talked QX. stronger QX putting QX So as and together, all QX than that, I'd better that as QX by transformation than HX weakest, Colin, QX, and of cost

Colin Langan

later think? If had also understand is year? two the I you Got for mean we about How still I your think what it. And guidance Will China? be should said, market current about you restructuring quick it And think just impact? that see cash I in that in is would what ones. originally the flat. we last

Dhivya Suryadevara

Yeah.

a spend, as the stimulus XXXX what's out. Obviously, we're have tail $X.X a XXXX. outlook And volatility total to in about there's a lots cash from going and addressed cash play of anticipating China standpoint, measures paid will There's going So to be we're year, from yet well. be incurred a billion into and other going Mary and see left $X that to and on, this perspective, bulk given the of roughly billion how of it.

Colin Langan

Thanks question. my enough. taking Fair Okay. for

Operator

Thank you. her I'd Barra over now like to turn remarks. to for Mary closing call the

Mary Barra

billion this to want by Thanks, cash reiterating of and outlook everybody. and morning earnings I share $X.X between our participation per full-year confidence the I billion. close to really free appreciate your $X.XX in our call. $X of $X on flow

we had said, And on think was this a of record track despite line expectations. as industry have our the quarter challenges. in macro delivering Dhivya I with commitments our

that In we're full-size every next forward, United our trucks means to As we to States going is to the going vehicles. Phase, on flawlessly our to focus realize to the the continue to what opportunity move control. work manage going our last transformational crossovers Globally, cost and in savings we're outlined on capitalize the Chevrolet And franchise necessary China, in and we're going this we're aggressive the We're launching XXXX seize economy the lineup that new our to heavy-duty we've that Cadillac November in concessions secured further launching track. vehicle we country. in an strengthen Brazil. on healthy are to

understand And and opportunity transformation what's foundational have really leadership over. this I more of tremendous stake, we far the of business much us. that ahead we've and the from also at while, is work And team. portfolio, we is right-size our done So believe know the importantly, we to the

the this win create to have the the on value we and for discipline, that's focus culture and the create vision, shareholders. technology doing and We commitment, every our And day. what to

much. very appreciate I your you attention. thank So

Operator

gentlemen, today. conference and you Thank the Ladies that joining. concludes for call for

General Motors (GM) 30 Apr 192019 Q1 Earnings call transcript