GM - Earnings call transcript Q3 2020 | General Motors Company

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Operator

Ladies and gentlemen, welcome to the General Motors Company Third Quarter 2020 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded, Thursday, November 5, 2020. I would now like to turn the conference over to Rocky Gupta, Treasurer and Vice President of Investor Relations.

Rocky Gupta

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

we press on at the and Financial. GM's this Dan materials issued and call GM's via have We're release Chairman the joined this the Center Our call here acting CEO by I'm conference Barra, today also morning, broadcasting Stapleton, are Tech President Investor CFO. CEO; GM GM and on line, John webcast. And Relations GM's website. Berce, available of was Mary

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

Mary Barra

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and implemented measures in we We pandemic transformational-related also from benefited cost the ongoing to response the clearly austerity reductions.

company delivered rapidly our on Looking and EVs at adjusted see margin a way particular, reimagine and in EBIT-adjusted and customers business. in of of free can quarter, manufacturing change diluted transforming we our X.X% and billion This automotive and exterior ROIC and flexible scalable scale growth of this billion, a demonstrate of our investors and foundation adjusted $X.XX, you EV rein how by to company. technological interior a XX.X%, leveraging and the $X.X capability given revenue in our clearly the way view These empowered EBIT-adjusted innovation, designers our are EPS them capital results have our of approach of flow our lead net adjusted $XX.X our design. and AV to are iconic We of resiliency cash numbers. system, year billion, that free X-quarter which the brands, Ultium and battery The to and trailing providing propulsion our highly for underlying strength basis. initiatives, our is architecture, $X.X they will

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all battery well We cells with to system exploring are Hydrotec our commercialize fuel opportunities Ultium hydrogen as Honda. developed have we as the

its Francisco wheels will the in Department to because This backup vehicles Cruise or dense after with without launch our in California battery drivers the Origin complex testing coming deploy be to will By San X milestone driving Commercialization Ultium the the significant ZERO. preproduction of Ultium fuel and hydrogen and of with cells the commitment cells. progress have end In manufacturing company be at with to the backup which driver We environment. with our a Ground, vehicles to the our Factory developing future. of our in year. an file tested that Vehicles. coming Milford make We've built battery emissions reflects next is year, majority-owned a steering the intend self-driving a no Origin from heavily continues Origins' and autonomous at be pedals. go-ahead system and petition Cruise autonomous test Cruise urban subsidiary, GM commitment Motor system and and Cruise begun shared will vehicles to fuel of receiving AVs technology Cruise, vehicle, NHTSA Proving without the exemption first invested months,

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for be reaction Escalade, a citing fastest-turning all-new that Escalade continues including full-size now Customers' Chevrolet Tahoe all the the They supply. to Super can journalists average GMC dealerships, is great using our OLED and closest display. job vehicle outgoing like the our X technology. models And XX% XX-inch sales them and than of competitors. highest-demand, at This we're craftsmanship, transaction are configurations. Our are first Cadillac with are doing comfort Combined order build every build. enthusiastic. arriving higher Cadillac's available Yukon Cruise XXXX maximizing which SUVs selling software Yukon SUVs, prices dealers outstanding, the and is has tight the technology, share with Escalade we XL been of despite its to its GM-developed to Media helps Suburban, response and and full-size

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turn you. So John, thank I'll now very over to you much. it And

John Stapleton

Okay. Thank you, Mary, and good morning, everybody.

October. at $X.X $XX.X and and paid draw we QX, very was from billion resilience over we of XX.X% strong strong, our and cash manage at net and additional through billion billion have $X.X an the $XX.X years margins, corporate repaid flow. PSA. billion quarter EPS flexibility the adjusted in third into the revenue, to In $X.XX QX, the demonstrating $X.XX a in and in in $X.X in Automotive ability revaluation $X.X investment adjusted The in in other The gain EPS adjusted end revolver diluted built of liquidity downturns the free the our $X.XX remained disruptions. past business automotive resulting diluted of includes billion billion few EBIT-adjusted,

We the year-over-year and balance. while industry our year despite our sales the end focused or expect targets. results balance capital recover, balance framework continued as than have GM remain less with cash QX remaining average down investment-grade limited as by automotive X% above Retail well pay our the to inventories. of on at We to target sheet

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market to have Our a GM SUVs we full-size new are keep designed clear the dominated. in leader

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to move GM Let's International.

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represents has volume to Our by better high result interest credit of also of strength result Cruise rates. primarily quarterly in to of costs Financial terms prices off-lease which million quarter, led gain the vehicle and sale $X.X a the achieved since revaluation has interest platform, XX our $XXX Cruise the GM strong adjusted our led million, of launch family were new savings $XXX for highlights performance localization. as on for both billion the run the vehicle The third A in segment. due EBT America third $X.X Chevrolet decline million quarter market expense on Tracker other reduced XXXX, led year. vehicles, comments billion, onetime of for including its entries $XXX cost and success about expense than and brand as South to with its GM in stable $X expectations, consecutive years and of lower global this revenue in our of earlier segment transformational contributing a and Onix. QX. of now used since were due of a few provision billion and and in X/X progress We posted line corp meaningful of profitability of Financial, target PSA corp costs segment items. the quarter The rate

to of expect billion the of the We range end $X.X continue on through the to progress year. $X billion target making

last me EBIT cash the on provided that and let we Finally, update scenario flow quarter. you

has Going range. in industry in demand into XX been and light stronger, anticipating high with vehicle XX light million much SAAR the now to we to mid anticipated vehicle be unit expectations. truck U.S. original It tracking in the second million the half, SAAR we are pickup HX, unit specifically exceeding range

have We slower a within vehicles rebuild few been selling at to of inventory days dealerships, arriving anticipated. than leading

inventory our previous not by scenario levels result, our will a As reach XXX,XXX units likely of year-end.

monitor to environment, macro production the the to continue adjust the We volatile and may pandemic impacting economy. carefully remains and This affect is that evolving demand given adversely still and levels. timing which

QX driven from to in EBIT above expect stronger-than-anticipated used benefits the by and vehicle flow the prices, scenario be strength earnings our Brazilian QX Financial well trucks, free unanticipated performance and and our we However, credit full-size high and crossovers with the HX cash performance GM pickup on to our SUVs due call. provided

billion weaker inventory a billion group Headwinds entire pandemic, be $X.X to a range. levels we XXXX around in will Given XXXX XXXX engineering, an provide QX metals. with potential to early EBIT production in disruptions, level commodity unforeseen in no detailed XXXX demand CapEx puts XXXX, as environment on you fairly $XX.X normalize. in billion flow rollout QX as our platinum billion cash year against and company XXXX. the remains CapEx will compared I to Specific Opportunities full-size to with spending for in include reintroduce EV manufacturing austerity To guidance to per than QX in our as cost flow, would learnings. mentioned to level, XXXX ongoing provided is to of some $X cash with the advertising range, as the invest $X more increased where call. costs caution forward early and be in build opportunity previously, comparing XXXX lead communicated similar, the modest to to permanent HX total earnings normalized going year. run the an and thoughts production, updated scenario was free extrapolating performance dependent would this high be billion -- for from and are frame like in SUV free headwinds, particularly we HX during performance EBIT and due a retimed not assuming HX year our by I seasonality $XX.X to strong some of help expectations but an our February At rate takes. market and will We our spend impacted of savings include performance previously COVID operations

in we a least spending decision XXXX XXXX. As exceed of annual that future, to billion all-electric a result and CapEx accelerate at our this retimed our expect $X strategic investments will through

we strength quickly communicate on QX mentioned, of the recover Mary to EV demonstrate significant As will a November strategy a business results our summary, and ability more our In disruption. the from and XX. detailed flexibility

launch We on improving cash of business. our resilience and focus the the flow have continued overall performance,

on the We concludes move setting This to are the in now our of up the execution portion and of call. Q&A laser-focused mobility. we'll comments, future to win opening and GM

Operator

with Itay comes first question our [Operator Instructions]. from Michaeli the of line Citi. And

Itay Michaeli

Congrats.

Mary Barra

Itay. Thanks,

Itay Michaeli

relative and it some year. Just was North you walk And the America, maybe more we I bridge in maybe -- of specifically, hoping where truck just of John, as America into the takes we I franchise a to this us appreciate can think North through just given in power XXXX. there And about there just of earnings detail. the company's maybe pre-COVID, bit the kind the puts was through walk strength thought color the

John Stapleton

seeing what in mean we -- seeing the actually in is quite stronger the stronger were relative recent versus to what much I industry Well, specifically we're COVID. months

at look can our bridge. You

million cost calling quarter-on-quarter. I about warranty, of think out $XXX we're excluding savings,

I think you're translates what asking could stick, forward. what

put in of where austerity that into run -- to QX. beyond. they Itay, that go the to a in plants continue system we QX think will into our and as start hard, some And actions normalize really the bled big cost as And savings QX. to the in we see of start operations chunk, place I represents back

Itay Michaeli

Just And sort guess, like? more the on should that could if quantify a what comparability of XXXX look should John, as so, think of to clarify, ex normalized you XXXX of comparison, we I the about sort COVID? kind

John Stapleton

Yes. mentioned could that the not Sure. puts in with line more I and reviewed our what at the takes. do back Markets -- We We XXXX in savings. mentioned really plus indifferent Capital that have EV The levels, potential full-size pre-COVID spend. be We metals. Day February. we of mentioned build group than and line potential SUV and commodity cost headwinds COVID tailwinds: inventory really in opportunity, the platinum year full so the in

we So the where EBIT-wise, were real than that Markets Day. not at Capital indifferent

On into the XXXX some as CapEx this will different. result we strategic next will little accelerate accrete see into year. we that side, side, investments, a of retimed billion year spend well. $X our delayed to this cash Cash And as of a get actually our of decision

Itay Michaeli

Just maybe strategically. lastly, for Mary,

the over made the was the kind past. deploy potentially could you comment the of couple rideshare on we've is EVs relationship networks in progress if about that One talked the where Curious this relationship next of announcements of to something throughout quarter years. on Uber you can with

Mary Barra

Bolt it so And from in environment. is EV We X from well. rideshare perspective, functional EV was excellent you're an emissions vehicle. -- to rideshare it an Well, that drivers do and in companies seeing the have It's I very part the a the to the Chevrolet very opportunity think it did past perspective. that's deployed their within reach. providing And want

good and business. can So we that offering, we going think a and continue see to how we're that to available grow it's make

Operator

of line from Lache comes question next Wolfe Our Research. Rod the with

Rod Lache

$XX.X John, being what XXXX. first, looking Did extract for includes which bit gains billion on would little Or adjustments say quite you -- COVID roughly I of it this, you're hoping guiding a similar Financial understand impact for apologize didn't just to were but and COVID? GM in make for to be to thick you actually sort did obviously the that? was EBIT the I I that that seeing you're also from year, this you

John Stapleton

No. think I somewhere I Markets it our to can I extrapolate diluted EBIT was pre-COVID, EPS Rod, to were guiding Day, at you $X.XX $X.X number. think adjusted Capital And mean that $X.XX. -- we around

forward could look into we be think we there. we As 'XX,

goal Our would the in offset could is dependent each -- other, uncertain lot forward and move world. takes obviously this really as a the puts but we

Rod Lache

color And on you're That's clear. be year? ex a about a Okay. a as that's Is to expecting for still look reason pretty significant bit Obviously, GMI China? optimistic drag. what next you out any to there that

John Stapleton

we As environment. year, to difficult it's still a next look

can that. everybody think see I

upside? a which tailwind the us. next there carry really, year which any year. year some be a think full I your full for see will quite price a question, is that into next we've upside year, price Rod, possible I is And have taken will think a bit of SUV, of this year, and of Tracker, the have we'll we that we'll our is

are for can South two America. I point to think we those next year the in positives that

Mary Barra

to an take what cost Rod, continuing I just done of has Yes. business. add, team would job to the John addition The is said, thing the only of excellent also out in

team positive to very the deliver results. So is hungry

they're that. And night day and so committed and on working

Rod Lache

able trajectory growth the if or March in about the Oshawa Mary, updated EV? strategy -- thoughts evolved this with expansion or I Day. the any And lastly, all us related just electrification. especially at accelerating And past happened be mean, to and much so Okay. strategy? of EVs since to the EV distribution in to Is Any might changed at you it's to all changes just over the has with I was regard on here share thoughts year hoping market the competitively, some

Mary Barra

share very development system. we're battery and addition scale pleased where we we the since to battery EV of a going later flexibility Day, us on at. we're an Ultium and Ultium Barclays aggressively March to a So at our EV the -- strategy say the conference this done more have month. would I when But perspective, the a the lot of in From technology announced lot wireless we're That management March continued lot gives Drive.

lot have technology well, Both GMC sure So perspective shared been you going reveals exceptionally leading to Lyriq make the EV. of can there's the work very, went Hummer very from a see technology. and the we strong. We've and on has both a from feedback Cadillac customer

$X will we in plant. have be investment Detroit-Hamtramck. That all-EV in billion the addition, ZERO Factory In an announced

We And which in we is well. Spring Hill $X LLC ahead have billion and Lordstown hiring. investment Cells about of schedule, announcement, Ultium the we're have a the then as

that that leverage the back team, iconic we facilities scale leverage the we brands GM globe; and, quickly convert step a and ability to with have and component not which potential country has our the but an perspective, at the across look frankly, the quickly across against put the that very of a building. capability perspective, can customers the any in you when get So have relationship manufacturing from only I'd from other technical group; EV our

when market, talked to sure that look vehicles important. in all we vehicles getting about We've will and position make us And that fact things, out. So new our electric be a we the very give at getting leveraging already the going vehicles. you to major leading brands entire our across is from the goal Ultium is those profitable are leading think

everything order Other There's we're And some systems dealers. already mentioned what that you the also that vehicles. often I working and want customers transformation. to a fastest-moving quite leveraging finding we're tires. to deploying GM-based the do we dealers bit dealers deploying, I'll in are systems dealers. still are online. customers with new helping. the want with that partnership systems mentioned that say, kick most Lastly, we're of The profitable to our And been literally help we're

as business their improving that's So well.

in incentives, Hummer is make a point this the transparency customers with pay, where our done dealers. The excellent partnership what pricing so transform you to being vehicle no our proof going last customer dealers with on partnership able working provide I'll we're all an and So is you with and discounting, look exactly to know deposit a steps no give improve at experience. haggling. And GMC no being EV, X in to they're

great the I'm here, work more doing that we're to and lot So with there's together. pleased a come very

Operator

Our Deutsche Emmanuel from next Rosner question comes with Bank. line the of

Emmanuel Rosner

all the the on strategy. EV question I more today. color appreciate really One

capital gap has hoping high cheap latest I electric is from get all on said this example shareholder all value way table, Last valuations what thoughts vehicle the that market your And technology. from being to today, to the latest getting things surpassed be GM's. the on So best to your off quarter, the vibe you unlock strong NIO's was a to that's nothing but I'm market EV side together. and officially kept access is the for company. seem of certainly announcements

So just best to what's latest value. thoughts way shareholder your unlock the

Mary Barra

what's business and look on the maximize focused assets you always and over to the Well, to that the to something ability said, recognize committed business business all steps is not parts speed EV that's going going we're and taken Emmanuel, quick to I've vehicle, a drive as our necessarily When system, the autonomous as our many long we're the cause at EV and we have long-term as propulsion a value, that of well many term. in of that to shareholder there's other pop. unlock growth to bring

So we'll and on Barclays But talk our market. is speed more to about absolutely shareholder value the at conference. unlocking it focus

Emmanuel Rosner

us benefits here. question, of you a of you time being more detail magnitude curious understand maybe second Honda the America? a expected opportunity then line, lines And are the I'm helps North Understood. talk bit just if what from could even product considered, anything about little in alliance benefits, a the sort just with that could

Mary Barra

Sure.

As a MOU. we we mentioned in nonbinding announced September,

a great working have solutions purchasing. as connectivity that well on We to R&D, are agreement. sharing definitive making continue of scope sharing, things platform on progress as And we're the discussions, with are

if I've are and lead savings. those mentioned, the just -- can think about to you items that -- So significant cost

have in we'll pretty So at as make market. efficient the -- and to we technology us more leading we what look together outline also platforms it's a can do a agreement, to to both definitive and and but more make for allow EVs broad get

Emmanuel Rosner

timing-wise, when any sense the just be benefits And could earliest realized?

Mary Barra

start probably that's before need the quantifying let and agreement timing think Emmanuel, if them, to us I I definitive okay. get

Operator

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

John Murphy

back and portion recognize at XX to going this the the just one. years. and record at Slide you necessarily benefits in than -- data certainly mean the And and more I've argue for world $X.X some -- pretty the the I greatest can at wanted it's strong of got I mean but look a look EBIT and is I puts there's takes in in North maybe supplemental America not time, America. deck a and XX current time billion North

to think $X you the mean, right? this, of curious, not savings you're goal north this and may and a the there looking you're I let's now. But million knock pretty I And mean guys so some or up. billion listen, insanely the well think "Hey, not going indicated margin. you're out So doing for -- to I going is of out be got take I'm might still don't at repeat $XXX and maybe $XXX repeat." should maybe that just not million mentioned that cost But I just $XXX that's $X.X get wrap XX% say, you you it's million as price undersold. EBIT to the billion repeat. market going John, that You're say impressive, of hot that

very I why, America. strategy that and what given curious just in be to on of you that to humble did being you the that of cost sense the price to forward. North I'm go that you able logic So product makes some not and if you're mean underselling some might hold Because and and

John Stapleton

there. guess, comments I a guess I John, of couple

worked austerity look make there. brands, an from have the we've all-new forward X stick we've what perspective. full-size looking -- strength some $X.X the We hard we we tailwinds SUVs, at with $X to some As do billion. We're got can on hard billion

been launching at handful our got the If now really, us. you launch behind look years, mode, last of and -- the launch the we're the in we've Sierra Silverado, we've SUVs. And platform, TX

And demonstrated and utilize North years mean, we've we're better most XX% America margins. talked And forward, some about XX% going can even We've years I think we that to I XX%. so going strength. some of than do yes, in quarters the in X last

pay month. our Some in EVs the to to Mary and of use of actually mentioned And though, have will we're some going go more basis. go-forward think a the at to that, Barclays on this hard of the come middle acceleration of at I to

Mary Barra

whether our SUVs, all and think in the I business, point, growth technology. full-size manufacturing, and a that our especially But self-fund us it's North truck opportunity assets platform EVs America gives we franchise good our the engineering, to excellent really then John, of the leverage it's full-size bring, strength there,

customers even I with the think we're made focus modest what road vehicles look put quality, in I you you bit that demonstrate going earnings about a at the that. North that have that's do frankly, hard bring And America we adjustments it EVs potential, and North it. little the a to durable to America, being at to to that us to assets that think, is So performance to long-term the in when going underappreciated. allows on go high been that also John bit really want. And are takes on But and the we're

John Murphy

still I more inside we'll you're you've about humble the you're about second going a and shorter. I comments think be But question being Ultium talk made awful times certainly EVs, -- on cycle understand just coming helpful. That's days. Okay. powertrain and to you've it in but discussed there, doing being

in cycle being cycle you about What -- product or EV cycle levels vehicles faster, or did So have ICE clarify the may this fair different of just if in-sourcing wonder I be so release, on mean times times call. that on And Ultium mean Mary, of strategy historically. whether mean, the I then times you game been also, on faster does outsourcing be versus the talk should press EVs? similar could sort

Mary Barra

question. and really that think glad points, I of asked the you couple a So I'm

Ultium leverage So -- we in are well opportunity road about take as market you really open China. and perspective, have very have the when for going to North costs us. that work to robust a how we other and from And we're map scale have size an of markets we the think as there's that America out that have the we

think as what very there's huge EV a So growth GMC I referring for business. new the we've the is fact is ever times that designed, has and that The Ultium the to the vehicle we road. mentioned, modular. I fact the And been Hummer on you're EV put think fastest technology it's cycle in opportunity our tools. We're development platform using way on the

with when up a team the you design -- an how that allows for freedom EV-intended So The Ultium platform, you platform you're an trying design That process. that ICE speeds gives with to flexibility. not the start of retrofit reuse platform but of lot engineering. and

the GMC with that more there's seeing Hummer, with the and You're to come. LYRIQ and

have get those So all road. on process allowing the much vehicles faster are of us things a global to development to the vehicle

EVs speed we've but And and elements those the that because out taking cost the are cost do plan on so to the that, from we'll share more which is all -- about at that that. we milestones the are battery all And established again, the -- battery. allowing us about

definite manufacture. the we having how we and are doing down, at and ICE on Motors vehicles seen what of control, did JV a cell way And I those getting you've controlling need to think with we're change costs controlling EVs the so General versus

have aspect the every allows which to us it's rethinking going EVs business sure make represents that to growth we're think that then of enter to cost So segments it's to us. of speed, us into more base going many profitable allow a to opportunity I with in the that the allow front marketplace, us

John Murphy

past? mid-cycle Could mean are thing of majors the this that a

Mary Barra

years upgrade and look that of intelligence ability vehicle now the our services platform over-the-air I going you're new with exterior it's you only a out for X are to or Because something be And all new to, model previous on internally. possibly the us that that's something that do do business can in and faster, Well, I it. whether to side do put you what model a make changes to that, to you can the step you And in updates, go enhancements will it can have we exterior. back all X, customer-driven. also think the you if not ago, you at about mid-cycle think but have

it, underestimate course, don't VIP driving that by that EV fact XX of think John John, I the will vehicles going about to was on we're So well. said And XXXX. our have as vehicles, be

John Murphy

what XXX. China the do GMF GMF, it's mean is done. from Just I out I'm What we top John, year? XXX think on and left and year-to-date just the China's are -- to the dividends then have And I --

John Stapleton

in on the QX. at XXX nothing from be will China remaining Yes, GMF, left and --

Operator

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

Joseph Spak

you've I question. pandemic. I want back through the electrification plus, past to managing and guess, to strike the I the shown the clearly with mean a go year great done you've job

that's your here We've seen And showed improving cash that goal historically, big know, of electrification. resilience. solid the return flow. to and investment accelerating part But talking clearly about in been also the a I thesis, You investment conversion. you're

flow bit talking ago. So as about given wanted markets, you maybe should think the about help like, not a us sort the theorize the how case just thoughts could in maybe the I think free what's so year your of capital EV probably a could on you with to build on industry better and that. you that you going investments, And cash for robust it's about get to we I or And that. sounds it return accelerated these on were little

you mean improved actually can some forward initially that this faster You talked speed than does of to product thought? to market about market, but bringing pull

Mary Barra

Absolutely.

a a speed EVs We we're plan will what that. Lyriq than market the last are the I definitely in faster developing which year of ago. think, the year. learned was be evidence to at We've the lot bringing Hummer, the And and

have our will with more And vehicles definitely so new strategy. market in we quickly

Joseph Spak

one. a then second just And Okay.

expensive addressable Tesla's is of tenets mean the right, fair, be So to them at lower but again, certainly use profitable, And as expensive to look S of broaden indicate vehicle. it's market. also going the I in $XXX,XXX initial I to is Model vehicles was sort -- great. an their And technology, is the for you that to know well. cost plan, vehicles we the looks this one HUMMER And be of if EV really

the Bolt similar? core guess But between for I the question is Cadillac that, plan is, expensive the know product, So and about how of and end leveraging towards Lyriq the beyond luxury? EUV. cars? and of you've you want really vehicles, Like sort I the the maybe you stay some those higher-volume do got the Hummer think are technology also trucks Or do high segments passenger to the your and move within you to

Mary Barra

is the segments. initial going vehicles So Ultium the high-volume trajectory us that technology have we battery in for this the Ultium allow to have of in rollout to

across think will we our about when and brands heart into brands, So high-volume plan you definitely Chevy in have segments. in we our value, on affordable across market entries -- and of where plays the the segments

Joseph Spak

clear. very Okay. That's

Operator

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

Adam Jonas

Just a questions. couple of quick

LLC. Ultium on is first The

so entrants of skateboards with You're to seems that those of really rapidly developing entrants, in. get be system kind that entrants want all-new -- that many or a of there that is the they're when capabilities to scarcity whether module, at in -- this legacy business those a time --

third-party obviously, GM I interesting time core presents that Ultium help think also so market And to an and of is business flexibility, the opportunity. to but

specific, state to us at addition discussions the of in from third-party Even of you Ultium discussions tell manufacturers? a this customer, which will, if point? disclosed as other be Now discussions Honda, you if can't are there such on on? to supply any can you going potential other you've Are going

Mary Barra

a a two isn't Honda platform the that our So is already Adam, Ultium done be one vehicles. will leveraging deal Honda for possibility. It's

as others, I work there's with underway. and opportunity you are conversations share tell other right would on don't anything but now specific there we just have more I just to them. -- So

Adam Jonas

a And just cash Okay. on Appreciate return. that, follow-up Mary. as

and through shareholders. pre-COVID, Am in us to strategy is you that past: . world to money define post-COVID, And took out what's more do Now investors very laid of right or as that did left, it order those then and with much am right changed? of in sheet; balance wanting be right? given business anymore reserve they in emphasis the conceptually here? of investing the on and still a and waterfall was Is back guys while greater opportunity Pre-COVID, this the growth; business; life the the just return buybacks, that sequence and used think but excess share your thinking not are profitable what business. on it we out post-COVID, that it thinking much this growth the as you cash clearly even if wanted what is, gave has growth the That instead return it, is I you to left, invest emphasis and give may cash the that you I right fortress while story? -- and perhaps returned really $XX to a balance still billion you -- you've in the sheet story fortress that of what's you ahead managing you

Mary Barra

generate I as Adam, to follow pillar, going you we're suggest, to think which was our sheet. in balance business investor-grade an allocation invested going maintain returning a then of strategy, capital still blended means appropriate to reinvest We're third returns, the to And return on capital the XX%. shareholders.

Wexler with Alan Motors. joining we the General EVs, Motors. think believe growth we are a focus accelerating talk services I are That's for do programs very world, opportunity can the is services I that addition of putting can't the us we and important see rest a of about going General to deploy why of you the to of but huge growth hear what that that number lead we're saying on the there organization.

growth still do we heavily we first pillar. investors. that right opportunity, thing to so that's for focus on the all the want a will see it be But on facilitated that pillar. growth we We'll our the by maintain And because first opportunity of focused and

Operator

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

Ryan Brinkman

how think quarter. on about savings able is content questions suggested from factors that we of should GMNA before in $X.X austerity you've a savings need XX, sort GMNA you might as I lower in to XQ, the temporal but be follow-up continue? structural Slide the from also on cost reverse specifically new cost forward the pricing. earlier. tracking think cost contribution might Congrats more how which stems netted against of year-over-year out the higher line And savings of with cost starting as you that in the as how billion savings normalize profitability going Maybe austerity-related of launches, parse And combine driver on Are related much versus to much shown to nature? in structural on might such the more this SUVs, as the are such

with you helpful. able any So in for be be that would went of might provide the GMNA very regard to to of disaggregation the cost XQ sort all factors different driver that into

Mary Barra

we I way you there look will is et EV. would to also the austerity There business to accelerate resumes as incur. pandemic. will as there manufacturing, But Ryan, the hear cetera, we're through well savings is that were related are be the costs as it, what demonstrated that clearly, more measures us And be So the we saying at going transformation.

of to rollout the Significantly and is EV So engineering improving some going will both go of that against capital. take savings that.

So the I we've think way as to and we're you but factor yes, business. forward of the we have map 'XX, savings now business, permanent to try in, look made other parts you into accelerating do in

will And some that. fund of savings that

we'll more to fourth austerity time 'XX the around frame when provide of we we roll February about get will the and out Some stick, earnings. when clarity quarter that in talking

Ryan Brinkman

heard of John I the U.S. XX expect a of half light mid say year. SAAR you lastly, the to then in back high think I that And million Okay. range vehicle

so through XX.X at last about million. couple and October, think the it's far at Looking running July at I million XX.X of months

if or kind any anticipating November here perhaps curious seeing in cautious. December being just So a and slowdown you're are just or of

hold or strong sort of October to continue on I'd inventories to replenish risks about, if the in how uncertainty or else. you're sales, I market, in about if given due guidance, to forward. derisked like to wholesale, But cases know the based don't COVID going something think September your ability or to the which I feeling your in curious higher know, around is XXs just still, you're election and likely be near-term concerned it's trend is relative you to any think the

John Stapleton

COVID we projection. No. I though, are if mean we very, What our didn't bake the you retail SAAR very will, into uncertainty, particular, strong. on seeing, in side, really

units. in SAAR for If total, we HX, year. you last retail the Last had with it's in look at million virtually year, line XX.X

retail Fleet you fleet, -- if So more we continued dialed second half of the into toward in see SAAR and rental have COVID, a in year will, But we major the half barring companies. see in customers second a back the daily do QX. reduction, strong the actual relates bit. event

Operator

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

Brian Johnson

Obviously chance in the leading not refreshes, you software about the a we'll the updates. the by it's I appreciate just capability, of couple think propulsion of digital vehicle to update when company, EV ask want if and to EV talk it's weeks it. system, have about that's But will, EV do advertising a delivered the the frequent strategy, kind cockpit, for people mid-cycle

modern the and expect could broader and outside that of them us in we vehicles give see transformation the also electric themselves relevant or, for a to propulsion to digital can you So you either fresh of kind mentioned frankly, sense keep buyers? Alan in lineup a Wexler, EV

Mary Barra

a got it. lot has on line of your Brian, static Yes.

I as you're digital I the do the So And platform. a transformation. got digital the question. vehicle think We view talking about

opportunity integration speed We have much better of have control, or better the put offerings. gives have -- years much inside. us software we in-sourced the X That to all to the and last virtually so, new over

all have vehicles the with on and that over-the-air, a we of OnStar service see ICE what for definite we our as we the just of EVs, not well, have opportunity already. So for vehicles, vehicles to opportunity build connected number with with but leverage

is as say opportunity I both So huge a growth ICE. and well in that that, EV

Brian Johnson

on terms be Okay. types non-EVs, in much a sort showroom would different showrooms? when of And in connected, more when [indiscernible] in of seen of could up showing cockpit, products we those see the

Mary Barra

Escalade that's And I -- to think look now, foundation there's right intelligence vehicle provides a it, on if that. the mean just in have I Well, and at X platform that you build -- growing. vehicles Cadillac that already the our see that you us

well. grow have we that So that capability. have working -- I the I that we as now services, to said, we then of think with team it on will continue a the And vehicles that's like number right

more the us the we going we quickly as have vehicles So to that that's leverage to as and opportunity the by can, platform. have XXXX the piece VIP, XX digital give following of with it as seize service

Operator

Crédit Dan the Our with line Suisse. Levy comes question next from of

Dan Levy

the on the on start to commentary wanted just first dealer I stock.

XXX,XXX, is get couple SAAR to We've of to now is, going not think, basically north to inventory like, you're months you But well which So question XXXX. And of I need rebuilding normalized. understood. which the million, of a XX continue seen period, into that are target reasonable should you XXX,XXX in your a that you Is going you of the at to maybe to a units conservatively? Or a it on roughly XXX,XXX were little expect we running monthly gross to XXXX/'XX stock rebuild more basis. try toward? play

John Stapleton

to as bit we last coming we'll wanted We half launches, of second -- high that and that think little very build off number. inventory the into was a of a think of were year. we I walked I

seeing we're That into to out. focused with the -- dealers what see at levels. We future. ordering lower don't number. much allows learning They're cost inventory think us cost approach see lower the this out. operate to XXX,XXX dealers taking I are and to with take now transfer our a do I

Dan Levy

Okay.

you're lean be just little stock you're on a be the going levels. So dealer forward, to to a going consider should to little aim -- we going more

-- to magnitude Just content have as product that portion credit How that's be said people a sense aren't with shared MOU. and much much that less but can on or get you trying And amount you understand can contextualize to platforms? current Honda? you And of be can Honda Okay. could into maybe the for commoditized, Mary, us that a is? spend just the giving with what's reinvest help how for, I is you on then but or maybe TBD significant the which shared on combustion allows of you the follow-up. your little a timing, the more it know value-add maybe can that EV. you budget of Honda

Mary Barra

all, platforms. note also first Yes. Well, to already it's of I sharing we're important think also EV with Honda,

more we having is being happen I over-indexing I And -- as right tell and Honda are will you point flexible going that. that. quickly So platforms and it's efficiently. will sharing products each cuts have it we quantify to already do on engineering I your from the hard offering. that capital EVs. very of mean while then as as joining our perspective a us different the hits how to for much to mentioned, -- with half with with market But we that perspective, transformation with in EV well much on top of an now do core it a our an into ICE we go EV may on those continue allows I Honda for think virtually the that for and that key

platforms, would hard savings launching. on available. programs changes an engineering significant started do me so you tremendous there's will have will we perspective. and year-to-year that just So for because It to But tell what from there. based say that there we savings quantify to already It's we're as EV I it I commonize -- be cost is

it more there, potential just So opportunity makes us further there's efficient. and

Dan Levy

And on is automakers fold sharing side? it combustion the possible into the other to bring

Mary Barra

possible. is anything say would I

look say, most I'll schedules program across align. look industry. for to we're and We efficiency that. drive to what But ways to have for the to We're the new makes open sense how, opening very

Operator

comes Goldman from Our last Sachs. the with line Mark question Delaney of

Mark Delaney

deployment? that as performing more get these think seeing further that in deploy? factors order on needed get Yes. just the matter you that a better can it are here confidence news do commercial how you Maybe to of get key Francisco. will understand ask there's be the to do able hoping and drivers time you approval I are about with cleared to driverless Or to vehicles Cruise from or Is in you to technical us help regulatory and no are was San hurdles order to to need commercial more testing what enough to in getting gives to and the be data deployments.

Mary Barra

look we're you at we've with a you San ride-sharing, discussions without in continue a going already if engaged important the milestones the going driver both we'll to for we're our why and testing work commercially. in that technology that's environment. to then is And development regulatory level if you regulators the urban operate urban and Well, When just ensure to announced that perspective and this what that's we're that do about to achieve. commercialization, doing that environments. what so in a safety opportunity testing think position dense complex need with vehicle, think I think in -- yet then the And year we're in a first a with to Francisco even it of the about be is, in another and from today's profitability we

to will a then and environment, capability well. so technology in geofence that And deploy vehicle area -- in being us only able can commercialization to faster as a think, the vehicle the And suburban profitability. the that instead means area, there pathway I of operate and gives can the grows continue, the vehicles

So both together. will go

Mark Delaney

company helpful. XXXX that for forward. perhaps headwind was And of sequential cash flow. Kind working going for on a that on relatively or and flattish scenario, question capital as basis a either a SAAR into the discussing What would XQ a imply within as tailwind Okay. then That's a well?

John Stapleton

Yes.

we we a free QX, had huge billion, burned $X.X so billion it QX, We For almost of cash $X rewind. unwind. flow. was dollar-for-dollar generated

QX QX. toward beyond, we're a really more the big in managed impact As as and working levels not normalized It's on hardly capital. already any we or look forward, happened now,

Operator

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

Mary Barra

full-size proud sum quarter, Well, and to SUV, were transformation. EV a we're up everybody's appreciate it being vehicle fully the market. very demonstrates especially the really crossovers, for that But in the portfolio trucks I I of full-size our in delivered. interest, maximizing thanks, And both that team everyone. by new think obviously quarter. was recovering great our Very results helped a it strong strong

lot very Overall, we the a and outline accelerated build that an We General worked growth and very about start to And agile progress. opportunity also a have it has I our talked greatly AV our business. think, more to this team does, EV hard announce morning, very to Motors. significant We've for and soon. resilient

the that demonstrated we've think I over the third quarter. second and

only strong that franchise, value shareholders. on We create also our are focus business all opportunities with long-term will a committed to of but to growth for our continuing not run

I everybody your for wear participating. mask. healthy, stay So And want again please to stay safe, thank

Operator

you We Ladies joining. the call does and for gentlemen, today. conclude for that thank conference

General Motors (GM) 5 Nov 202020 Q3 Earnings call transcript