GM - Earnings call transcript Q3 2021 | General Motors Company

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Operator

Good morning and welcome to General Motors.

Third quarter 2021 earnings conference call.

During the opening remarks, all participants will be in a listen-only mode. After the opening remarks, we will conduct the question-and-answer session.

We are asking analysts to please limit yourself to 1 question and a brief follow-up. ]. instructions [Operator

of this XXXX. reminder, the being Wednesday Vice recorded over As would conference now XX, President and Treasurer I Rocky turn Relations. I'd October to a Gupta, is Investor like conference to

Rocky Gupta

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

I'm Mary conference materials were broadcasting available GM's Investor GM the We're CEO, call GM issued also are Paul by GM Our CFO, Berse, Relations call this joined chair and webcast. and via on Barra, President this morning today Financial. website. Jacobson, and of Dan

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

Mary Barra

(ph Thanks, opportunity you talk with ), everyone. have to hello today. an Rocky It's to again and all great

Before of results, Paul in Investor and I to Day. or who our in you thank remotely recent quarter person want I participated discuss our third all

clear matter deep revenue right I appreciated team with expanding to that our subject talent we growth annual have including our right to goals, leaders to we the margins. achieve Our have the and the to you time opportunity have hear technology your and spending the our doubling and strategy it's perspective. right really assembled hope After our dive to platforms and our long-term experts,

platform fact a automaker significant in from progress comes traditional from making the a really transforming Our we that already are confidence to GM, innovator.

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Now our over about I'm Paul, going and to to who more turn will the the call share quarter outlook.

Paul Jacobson

earlier by Thank We strategy the expand We team our month, this in margins a that And appreciate challenges. time opportunity outlined us. and face during the We our to to execution the XXXX. quarter long-term you, our good join that to double the crucial of of and morning, I'm Mary. strength everyone. the our continued business you taking including today of growth, underlying proud believe by the is delivering element on revenues

modules $X.X produced to working without result certain shortage. the negative $X.XX adjusted. downtime into generated the a to QX, and capital as quarter, billion semiconductor was results margin, levels, EPS of during net flow automotive in vehicles diluted in XX.X% billion inventory So ongoing Adjusted adjusted, detail.In billion lower free impacts $XX.X work-in-process plant let's production of higher EBITDA we quarter adjusted due $X.X more in in the revenue, from and related in EBITDA cash get the

contributing the production in modules without the expect capital free positive realized on wholesale. mix are increases and built go-to-market North impact working our strategies. unwind cash our performance strong to to completed We again, and flow We through actions prioritization vehicles and as and production price America

pretax GM of drove and to prices results recover vehicle quarter, recall. we this used was continued the million. the $XXX the associated at with agreement reached impact cost LG recall an In Financial. to agreement also excellent of Additionally, substantially quarter recovery The the

pricing spend. with agreement LG. pricing percentage SUVs, North customer at QX, of look region. delivered see in pickups incentive on From our closer So and full-size we're adjusted limited is X.XX%, driving as to quarter, strong QX growing and share or And which spend points dealer transaction ATPs, our XXXX. inventory, lower ATP below the America with billion generated let's take standpoint, and EBITDA we're strong of adjusted recovery $X.X high with for fell In demand the a continuing segments. the key products a In a North margin prices X.X XX.X% in incentive America. our a EBITDA to continued even We and these percentage maintaining

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across continued A quarter, in impacts despite paid GMI Financial substantial in million, China $XXX of estimates in EBITDA rate -adjusted to income credit $XXX and GM progress cash over our million was general quarter price the and were adjusted Cruise continued growth new XXX consumer impact the we despite Corp performance. EBIT positive in GM quarter. $X.X comments semiconductor Cruise GM move has fourth Financial on segments. of few billion strong including as experienced loss international. to the EBT and the trends has break year a administrative a vehicle flow. sustainable million our material GMI on mix, anticipate in to due income used benefits made the toward and GM Financial in cost stabilization with structural even and progress semiconductors, excluding of in pricing, investments our run and million equity profitability China Let's its reinforcing equity and pace a was path And mix with dividends with year, the businesses. million $XXX segment. $XXX be losses received of the continue. as line we costs, record-setting from $X.X to We've and additional billion dividends corporate favorable prices QX year-to-date. up

volatility to which volumes the for higher Despite in to the some QX. continue outlook teams expect work we the year. of rest to Let's sequentially supply our the turn chain ongoing mitigate, in

along We we're have increase to to investments guidance clearly to also expect market. in how we I performing costs articulate want initiatives. our sure we from in make growth commodities the logistics that and relative the with

at the approaching year to guidance of range. end the QX adjusted We expect EBITDA $XX.X $XX now $XX adjusted that to EBITDA high and range recall, guided billion. provided billion we achieve a to of began $XX.X of of earnings updated EBITDA you full-year As adjusted with

to mix EPS tax full-year Our diluted determinations revised favorable a tax by increase range a $X.XX of to $X.XX effective adjusted rate global will earnings. due in to driven

adjusted We to EPS end range. approaching achieve that also high of expect diluted the

be work-in-process to process invoices early guidance into as Now impact expect update to related be the provide in capital billion. now well of range expected is that Note the previously capital that remaining schedule 'XX. this inventory, the to $X by maintaining work billion upcoming provided. flow fourth vehicles investments, clear majority to cash X we billion Ultium will includes some of quarter, year-end. inventory automotive I expect the approximately of in our required Adjusted of team investments spending, JVs. the to range this This the year. end $X year, without our we on at our free for in $XX the Through our want including anticipate inventory as We work below to while product slightly now an certain produced spend to result timing remain at $X reduce modules to the both on innovative decrease shift the of year a certain but will programs, is

additional provide half progress new units we're at As GM we these as for as We we've begin indicated, Event. inflection wholesale we focused months. an will of cash relative vehicles. growth and XXXX performance and that the you To journey. we're the in we first point in at close, on provide that flow this on KPIs metrics we and sharing KPIs benchmark Investor our We laid to with milestones the look plan plan our to some use interim out to coming that to forward to will the

may a question call. maintain opening to execute have reminder our we demonstrate follow-up analyst, we'll the comments and to today concludes the asking the results A on on move we that that. everyone of we will strong call. the and portion one and As business limit are plan, we get our growth so A we to to Q to now This these yourself brief and

comes Our of Levy first line Suisse. Dan question the Credit from with

Dan Levy

thank morning, everyone. Good Hi. And you.

just what question the First, on Just pace pace in recovery ahead. you be of you shortage? will then, for emerging the is the volume supply when expectations magnesium expectations recovery. just what is your baseline shortages could improvement mitigated? maybe tell And a of the Can just us the us risk fully of you shape the volumes, any on have from do tell

Mary Barra

America of significant think Well, We sourced. The Yeah, alloys price have for nearly our thanks, as constraint percent to of Dan. near-term small Chinese Related is we and supply very all we risk. risk our not aluminum magnesium magnesium a North some operations. see is the it shortages. or purchased do a do aluminum escalation there domestically

are you We'll I'll And right situation. that's continue we view if So volumes. working our monitor mitigation to we let appropriate the steps needed now. and take with base our supply talk but Paul,

Paul Jacobson

for Dan. morning, question. Good Thanks your Sure.

we trajectory volume, said half So units. we when second we it XXX,XXX outlined on be approximately the to that expected down

majority of in first QX. certainly Second That's to the what half seen. half we have with that occurring

So we in we commodity being seen, that second what quarter, well. inflation importantly, manufacturing said, more from volume QX. sequentially our additional cost growth more look significant facilities relate making but in we saw look expect they volumes in most of we've and have which or pressures business we investments of That a as in we're pretty the volumes, either step-up that sizable into QX at side QX like to the the when

off hope of what we QX see said, recovering we where in certainly is that is XXXX. see ,which to go volume So to and were consistent we with and as through would expect we that

Dan Levy

Okay.

improvement it you just -- ongoing like. a [Indiscernible] continued sounds So sequential That through for was through XXXX, this. have

aside to it I certain vehicles a a are certain on -- easily to I laid which question simplicity? it could My just a or the opportunities that's sales? to or be margins, the target margins and Okay. know in-sourcing setting through than you're to or quarter, your better what more going want past now, greater targets better want could the see in other is bad I Thank But EV other opportunity with comparison finally I margins equal those aside EV second -- have And you [Indiscernible] more I'm margins. think cost? Is just strong direct-to-retail you. at big question boost Just and us battery, be put materialize could Is you third for EV a to the quasi starting things in improve attained. battery architecture the out draw draw be up from put digital, margins to to opportunity, EV there you ICE, part. a some I where just know automaker very wondering the just to see areas walk EV if how maybe battery the you software consolidation, out

Mary Barra

Sure.

we savings because as the what's ensure being just platform to insignificant platform engineering margins a that the rattled off time, think Dan. we that but there's scale control vehicles, and see lot what scale the important. as going is the -- coming We not vehicle I way we're leveraging improve. as the launch understand to all really customers want. battery and of going able We aspects them, working be system. well with from done And extensive we half to a roughly are you're Ultium You we've looking clinics of that definitely of off across and the as affordable, from Obviously, to less EVs are the the on part to focused improvement already get consumer scale do get the

on every at to and that going scale looking And see and it, that of but we'll until get across we're battery to be vehicle improve services will it. that it's of you the vehicle. you'll The think, you will the get be think then, you be aspect mentioned cross then I another. revenue a able sell top I the that don't to drive platforms,

plan So working we aggressively. that quite on are

Dan Levy

Thank much. very Great. you

Operator

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

Rod Lache

Hi me? everybody. hear you Can

Mary Barra

Yeah. Hi, Rod.

Paul Jacobson

And good Rod. morning,

Rod Lache

I big you Hi. can still XXXX. We know hoping I of this a morning. thoughts some early. on us items. first, with little help bit know was some Good the more it's

'XX believe is going still raw going how plausible? provide the with In these volume like a materials like, with should the XX about from over Financial, in volume, reversion spending and some strike, and on to some $XX on sounds a because some GM you it's path headwind upside be of North % 'XX positive thinking it that America by that? you but margin the [Indiscernible] the can EVs spending to particular, been, and high-level you're for we be offset the volume brackets and billion shortages. the You're and on side to you course have That's of 'XX headwind

Paul Jacobson

start give, and that, I'll add in Mary Yeah. to additional any wants obviously. she with can Rod however

I task. think still we that certainly see do

I itself. moving the think pieces your in big question you outlined

Paul Jacobson

certainly going see to we're it in lift volume.

see we're lower seen actions will think very coming, be to a I contribution different year. prioritization be it what little coming bit some took volume this we the a mix of will the going incremental given of than we've that because on a

do that and that we to our either had would trim pricing offset we've Certainly some we Going want forward, or bit. inflation, impact, other seen. but commodity we've be but convicted actions still that ability we about little have be doing the of seen mixes, reduce to things able productivity otherwise chips a remain we've through the to through that to

So I we'll as at get we think have right more certainly detail, looking into XXXX. we're next provide color now early year to in and

Rod Lache

Okay. of for any you just or or But can't prices magnitude kind commodity volume maybe around is what provide where brackets are on of possible spending? spot high-level based

Paul Jacobson

inflation Well, the broadly half to seen I of the the of earlier in summer. this of as and commodities think we a of in lot little that occur supply that a expected commodity Everything the the bit highs retraced year, chain. is moving around, from the seen, we year. said bulk obviously, We've volatility first we've of this

we've So that go around as billion look we we're now. on seen that, seen. volatility could But based we've either way, but right XXXX, a dollars couple of the triangulating at

go anchor right of now. budget provide plan. we detail So on as that's the and and process hesitant more why through we'll our part looking We're certainly I'm macro at trends it that's to

Rod Lache

the this Okay. a about drivers in versus QX. just QX morning little second, of confusion Thanks. And bit there is

about like to X.X volumes that. in of got But of a looks fair magnitude Maybe whip So it elaborate inventory QX, should reimbursement, but would've would maybe bit you can some the be GMF range on parts? said third the been some adjustment it the high guidance I there's so and a the hoping those you've and up like you if bit. quarter, some of got sounds EBIT of commodities. now, a talk quite a in extra end sequential moving little be hit amount in mix around bit looks was can X.X you've your it maybe like billion little you you In

Paul Jacobson

Yes.

got that But terms you numbers out that if you build to So at fixed included you'd a see QX going forward. -- some sizable pretty from shy sequentially jump at when we of look in look the articulated, the some seasonality wholesale costs costs, clearing you've of QX there. in is in the

putting as particularly new but and the on and around forward, new some on plants, vehicle You've investment we going the decisions some in got of investments in cost and going the go staying marketing-related That's long-term where that manufacturing is just engineering has to the the this. campaigns that the of Mary we're launches through general across pressure future, type mentioned focused the board. of forward, growth

Rod Lache

Okay. All Thank you. right.

Operator

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

Joseph Spak

look if you -- this Paul, we to also reimbursement $X.X the morning. items the it headwind back LG from billion cost Good X quarter, Thanks. had a in here, costs. maybe we just and and then follow-up the out at about third like looks

investments. through just went You commodities,

think bit, I how a to also there's us of about bucket but little you that can better going we trend forward. think those a so [Indiscernible] some just help can

Paul Jacobson

Thanks, about me, you're to QX clarify Excuse to sequentially? Jodi. QX talking

Joseph Spak

quarter no. the In year-over-year. Sorry, on a third

cost? Your

Paul Jacobson

Yeah.

Joseph Spak

Yeah.

your was $X.X If cost headwind. you the out and reimbursement, back it billion a the and at good you recall look

made what trying I'm up? that to understand So

Paul Jacobson

into investments rule, put would I forward. going commodities we've inflation, would half And about half as of in I and fixed a about our that general seen that then say, structure. what of into growth cost

Joseph Spak

said just the Okay, you you CAPEX, that's it. lowered helpful. then And I know on

over Some I some your of XX billion like mid-term. timing. said to think go that sounds that you we nine the event, about is efficiency, back of If Investor to

year, next -- even timing some that we little or bit issues? think So higher about was towards maybe maybe these end of given a the above should

Paul Jacobson

that is and take but -- on the the is I just time-to-time, target, important to everything that's concern. away around and because XX Yeah. this with would guidance, biggest bounce from to stick thing think things that X that's on I progressing from update schedule

for you, you. gotten on against sometimes that it sure has tracking the year efficiency the investment what the our which between we're as goals, timing make But it better, remains will moves longer-term and well move, that timing is hitting of the consistent. as sometimes really to moves So we're

So just the to with I X XX. would stay

Joseph Spak

Okay. Thank you.

Operator

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

Brian Johnson

GM we've is, to the biggest devoted some sounds Probably to getting being but want one whether questions about billions particular to Good I the been the back markets of you capital morning, In all capital the -revenue C&D. companies. Team. pre good, time go unanswered what need in where are from markets?

capital think you between Cruise if in think about that, versus milestones if tension metrics of So of that least rest another light, the looking part market portfolio, out that the for Softbank on how it's when ever, markets? time, of take those of do the some for now? the at And triggers particularly if they're then about what's for and, for advantage to commercial the example, you're public taking you conditions investment waiting paying

Mary Barra

perspective, From funded. Cruise have well Cruise a we

with our of the so one huge are got manufacturing a out along reasons with technology as it's only have that driver actually well GM capability well involvement. to we steps a Cruise as integration as aggressively vertical seamless take well in key And the the the the to positioned and permit what the need the look of the ability GM's do the commercialization Francisco is you though taken, with San differentiator, at and is person I leveraging So we've Ultium, think, with Cruise, value. vehicle. we're to executing already That really as of is integration with I to as believe who's

will Cruise best enhances longer rapid what I we're shareholder So message we're and commercialization front that's the gf is the board well over think play term value we executing. funded of the plans and overall the creation And have and on at u the in the value look shareholder. s, for

Brian Johnson

eventual place? and seemed in as is pay a offering question partial a to specifically, to that like [Indiscernible], B, of there's when does to A, it an tied opposed Dan's a at imply that least if, public offering. was Well,

Mary Barra

term. flexibility board with thing the to I would the agreements say do the has over way GM the the that written for shareholder long were the right

Brian Johnson

Okay.

And tied or you idea hit in to consider and business, e.g less the of might the some the actions targets of other strategic Pam's portfolio commercialization business, core of be things earlier would to vehicle be fuel-cell on light those? them the could some

Mary Barra

shareholder as each transportation Again, there's even what stationary we'll well creates from and one across we vehicle fuel Clearly, most application perspective. for power. many as different a industries a value think evaluate the cell

we So way structure to most the to remain open that's a those value. in drive going

Brian Johnson

Okay, thanks.

Operator

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

Itay Michaeli

Great. Thank Good everybody. you. morning,

Just from longer-term. short-term, one me, questions two one

from the split how the bridge, growth. you last that about might trend maybe second-half I HX, do going and QX billion HX rough Paul, back investments number right On the to of X.X commodity QX? to still costs, Are quarter, short-term, to a think versus think outlined X.X-X a increasing of those billion in And about? have you

Paul Jacobson

it's for that question. with trending consistent, thanks What really say, but still would Itay, Yeah. it's I is largely volumes.

but it expect in I in inflation QX that's of quarter-to-quarter. of the more sequentially, QX, lift we that So is that did hit going than volume would see to because really that just

Itay Michaeli

XXXX a longer-term interesting only of the basis, XX of or maybe XX ICE billion on just takeaways on the target revenue. of one But that helpful. That's EV think of revenue a have you it. I Got revenue loss billion and is XX

XX regions, EV for of driving today, the potentially unpack implied implies include share market new Maybe a and is kind these billion more there of or you markets agreements. around that a what's really more for talk share that new that operate us pretty in gains don't gains business. healthy types -- So other

that little detail a more to on split. love Just get

Mary Barra

together underlie that and our I put forecast it way the would look markets. we at that current So for plans our at the -- is that the

our I think customers fact have quickly performance brands. with luxury EV the vehicles brands serving the of would it a I that again, say I growth way enter markets would look on margins. of we top And the that. how that into to other That's customers, relates to we're X going So value customers, at broader if in full fashion, across portfolio a

Itay Michaeli

Got it. you. That's Thank helpful.

Operator

Colin comes Your next with Fargo. Wells of from question line the Langan

Colin Langan

taking questions. Great. my Thanks for

how to are Just much magnesium And which the aluminum what have everything wanted question. those large hasn't Coming getting It item there one, risk where their little been you international, line makes is pretty sourcing your aluminum a issue, after bulky like a supply. there up on magnesium, a the suppliers and a follow Is I the such operations? about complicated? that sight seems magnesium is to there do you guess visibility and global big, have? semi visibility. more from actually because of part good then, -- it's such much aluminum of

Mary Barra

Let's China as take our actions in we're it America and with as as working supply working North with specifically to monitor partners base mitigation situation suppliers closely closely will the to the we our required. we're with from Obviously, the well. say, JVs, perspective relates

So aren't our current that is conversations, we view again to a going with all risk. see significant those supply of

Colin Langan

Got it.

Now of XX much in at restructuring any America, there's And all Is ex I the just is in slide lumped Okay. and together, world profits looking then have color? GM guess the pretty there? South how that needed and still rest international a in regions bit it's been additional those weak. China Korea,

Mary Barra

ahead. go Yes,

Paul Jacobson

that take one, I'll Colin.

has you're is So way China, the say the allocated. in do the to excluding what a third seeing GMI quarter been that have performance, I particularly lot in would chips with

been would in historic sequentially say. certainly low and and recovering it's you quarter is But as if seeing America, pretty I plants to turn we've as share look South through you lows, share, market back at that October, at on, we're in what the able market look been the quickly. particularly near So

the think of the of is that the capability don't I results run-rate you're seeing ex-China performance. So indicative

testament to a been as regions done back it's further the look improvement think levels. volume have and restructuring those for I we normal in that to would fact, returns efforts In

Colin Langan

All for Okay. my taking right, thanks questions.

Paul Jacobson

Thank you.

Mary Barra

Sure.

Operator

Your of question next Daniel from the comes Ives with line Wedbush.

Daniel Ives

thanks. Yeah,

but when with timeline what the and about starts think the it -- Obviously, when off So going you on into the like 'XX, almost looking the next as are would my focused EV? some, through we view XXXX, at XX bogeys? we us walk XX question, key the shorter vision CES, days, it's not events what EV or can you're into key but

Mary Barra

EV really going to this be starts who think on of going vehicle to number both that's be understanding EV XX, year States to have truck are, EVs is as we can we've you do I'll the I as we're there'll and a at truck what what buyers. and new so also talked and China. a end CES, based affordable with traditional share people fall share we'll at little are will So with say this who in revealing in Then EV the the really and will CES aren't say trucks And and later even be Chevy But the At level those to more -- but detail United the launching about, year. more want, a that coming be can a also we'll the again, platform taking more in you Lyriq that. I Silverado redefinition it said about of by we the have Ultium And bit the by followed than more Hummer $XX,XXX in our owners with what revealed XX now. information. then in with

So an before share doing vehicle actions as the grow take we well not we EVs also, EUV, the that because some we to quite protect customers our only will EV was having with of out, Bolt the we and customers. to will care necessary pretty opportunity milestones took our of significant really have

it strong see in turns really landscape 'XX, a on. 'XX, I in So very EV then but

Operator

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

Adam Jonas

Mary. Hi, everybody. Thanks

driver So driver confident too soon? that does out vehicles How Is can Mary, in GM you've talked quarters, Cruise achieved feel be not years. of in out about XXXX? taking

Mary Barra

-- I

Adam Jonas

you're I know close.

Mary Barra

confident. say pretty would I we're --

Adam Jonas

support, a are enough me. on That's just moving Mary, good follow-up are moving car network revenue it like recurring fleet and your operating the rental become for yourselves as more designed, into OEMs this with connected and software Okay. -- into model. cars

what targets your bought of does revenue, fleet degree car on some based XXXX are rental heavily You see management. service physical implies that VW with which firm. Tesla and just Europcar, wondering a major software a I'm deal

GM's You support? strategy is fleet for what So thinking

Adam Jonas

vertically non-dealer car along way? integrated, franchise partners or and alternatives there Thanks. rental the in-house working are other dealers, work partners like with more logistics you the with like other

Mary Barra

FedEx perspective, that whole some if part as at you look and close them etc, I system the a a vehicle of helps Well, Sure. with we going BrightDrop relationships of how a we're commercial from Express, structuring think to BrightDrop manage have we are the have that holistically ecosystem.

I going think EVs, that not Having seed to that that to services we're points a said I think, vehicle, the software on ran direction. in someone though, the with of and the launch

Mary Barra

provides having lot that, revenue until And to say, there's just very it in but now sales, biggest of going again, at manage that accrue those conversations vehicle going think also I customers. or actually only software important. look is starts will to being fleets we're provide a that our managing because But and driven. said growth on the different none I right and to the opportunity, what in have you of else EV whole us to system and the services not

today, there's have I don't underway. announce specific lot anything I of but a So say to can conversations just

Adam Jonas

Mary. Thanks,

Mary Barra

Sure. Thanks, Adam.

Operator

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

John Murphy

in morning in about in to term, to midterm I management XXX,XXX had mentioned some wanted dealer inventory right units I you everybody. units inventory short now about run progress. this work and here Paul, Good long the think in ask

can right should you also, -crisis running that know let around If pre minus. been Then units us you've where levels XXX,XXX you both U.S. because you, is. the travel or normalize things that as in for what think plus number of be

has price guess question been tight be can it where do is, of actually the So much there But activity the that that very and catch-up. really positive to significant indicates you the I how land where does Hopefully pricing? So than at be short-term, what are long-term, actually effective mean might maintained? tighter stays? think then what history, for that inventory? looking you of do we And it and inventory

Paul Jacobson

and Good is to low, now expected XXX,XXX What morning, we've around seen remain be John. that the levels XXXX, that probably would through honest. I that is into to say inventory

of they healthy where but want there's back demand, to a expect want management of ramps vehicle, etc, the we're I to from to think I somewhat empty what opportunities inventory on see and because what and answer we which seeing think what more in run we certainly historically we see today, in for not for is what than lot of we've this, I buy less to good to and the of up the inventory. I be carried is go in thing the short we've pricing production meant the buy in this a And limited, say more terms as build going think inventory are want bit has would certainly beginning these lot would lots, inventories it's building we in to year, our they dealers demand levels consumers going Mid-term, lessons with learned and the off vehicle, start what a what been when environment. have impact wait. is, of don't said certainly quite to have a a that pricing right forward. to longer-term, We're what a than terms

But less that through market. I continue to than come to as this expect over the we through levels. manage dynamically longer we'll term, it be So historical the

John Murphy

I'm sorry.

Mary Barra

ahead. Go

John Murphy

after ahead. I'll just No that. Mary, go follow-up

Mary Barra

right add I I -- data we've spot fall analytics only a dealers of to inventory. support would on, added just the our better to thing lot is have the

and And getting products, think pleased to Paul as perspective. right well dealer we be our really that's going how something spec I'm less more the think, the so like with out I right I going dealers from said, at serve really to but efficiently. look way working to customer it's the efficient with much see a you're a Company

John Murphy

that want It EV or tag new charge That's like is I'm on the you base in parts a to then to EV strengthen core, the big the And dealerships as is think of about curious into of how as question just stronger quarter how portfolio, dealership entire other to if Cadillac transitioning opportunity have just in one big out, in invest in the your strategy. of the there And was product business? and ULA this incredibly strategy. in dealerships? your the helpful. a transition Cadillac base the you maybe sounds on you're like some an streamline don't they

Mary Barra

Yes.

we dealer important base were accomplished the been be will EV, Cadillac and clear has we all us what smaller. in to dealers, is wanted Cadillac, it vehicles. to very make our and for needed lot that dealers a selling right very, with, into with way. brand the lead think make of the it make high-volume, We transition to and some are partnership moving to very done -- investments was I when were -- the as have some with sure they And electric that are those

if that. weigh of through them, we the they can decision what's you in worked for imagine So that interest best

be the the from coming with Again, I'm did prove what right So turned Cadillac dealers customer going that's our a think it are to very making think extremely about excited the think, a that we forward, I that is strong well, is and support base with out. way but investments customer we all we I pleased very very perspective. do as now, and EV how to a dealer I model to so in it be go to very efficient that's going have are products support and it's

John Murphy

you Thank much. very Okay.

Operator

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

Emmanuel Rosner

everybody. morning, Good you. Thank

Mary Barra

Morning.

Paul Jacobson

Morning Emmanuel

Emmanuel Rosner

X term X then longer short-term So the and follow-up on question.

in I understand curious same quarter, And probably EBITDA On with is is QX for half guided points reason put of fourth think the you to about in time, asking QX. of QX the the are you across Paul, cost read you around you finer you a how short-term, in the expect good then I I'm if line some for about XXXX. be but QX, how could rate think what the well, volumes did if about at the I'm to pressure expect the run

So versus X billion. the billion X

there And commodities then there's so delta when like future. seems I and there's in over $X think billion in the investments that

second rate spoke about investments of year? about You plan? this correct,and do I going next in that into how understanding about all, the my is the what is first commodities, future? think So run these Is required your for costs

Paul Jacobson

Yes.

affecting were So that thanks, that or shorter have for go that. understand back to one-time In Emmanuel, issues term also impact order QX, question. there that some were to to we

you it, looking and at back that a out are when you So QX normalize billion of dollars. approximately

GMF some of its true-up had So of liabilities.

to were QX. in at mark-to-market basis rate on caught was a terms had the that some well. all that included car used the Now prices and We up as credit in that investments GMF run

look out So a a half we would you were, then down where into break I of billion and that. a billion you roughly take and that at about billion a to QX, half if to about QX

business over into in range answered the then, inflation vary seen the your run $XXX of the pressure that it off half some the of Hope coming should seeing investment kind rate? which we're the call certainly commodities, peaks. And that we've and about being time. So other a where on, being And million cost of, question.

Emmanuel Rosner

fourth-quarter, we That's do super-clear, business a but basis? the go-forward about these on how think in investments the

Paul Jacobson

the I indicative fourth think quarter And is that. of

products and XQ You fixed going But over to as cost about thinking time was going roll-out it's we're that forward. grow roughly flat it. being to XQ how to these see we continue

make Obviously, in are for that and And invest got we've launch projects that years. sure launches the for engineering be on So next forward. you've new a seen we EVs. going of the CIB going we're some going we going multiple to increase then few forward for in the cadence going pretty sizable in to

stuff term. I stand the we've that So and for got think go. the think it's And that long is control right investment good of where we we we where

Emmanuel Rosner

in between, needed? How ramp you some some manage average on and goals you is, on trajectory was is business question mid will now on margin, the as as targets to core for -- and roll margin, than at as question profitability on the target? follow your the long-term improve investments -- like on the the lower I of asked encouraged these I between decade, as profitability My then that up to I automotive ensure longer the in We're And up so see as EVs XXXX very XXXX. the business Great. you Capital very - here upward well will the of to Day. that by as bullish how term before wanted these well margins Markets in encouraged

Mary Barra

I are just from that that. it. us are we on EV way allow also very margin build businesses at to the was that's Yes. perspective, Emmanuel, going to a to Obviously, that that's software to to mid-decade focused -- asked to businesses potential before going profitability an there and here's get in that investing continue scale, look question as overall, then so help But we the going create that get different that. on continue part be have of we

minus, at We're going to So, executing in to, clear, the being plus divest? the we decade not be we're have forward distributed go we're that investment the we do we're see we of towards everybody done accountable capability said held the the Paul, the said to maintain future improving margins. steady Investor or Day, going the with doing make to part think we and also sure the we've we as -- a have margins latter and we that that. to opportunities. because to been But is as right investment. that just to that targets going But and anything we then modeling that plan we're current roughly constrain growth

Paul Jacobson

that's going to capacity the continue us give day is additional X, truck the journey. the we've think, said from funding as which, to ability franchise, to I coming is an And on No. grow truck leading

offset shorter-term pressure to some see. expect So that, expect we from help you that margin to mix going that's a uplift little otherwise that might bit of to of

on -- I business about making So into thinking sure and of heading talked bringing the how focal XXXX. through and that transparency prepared to as a we're point KBIs in this 'XX going about be remarks, we're my is of

Emmanuel Rosner

Thank [Indiscernible]. great That's you.

Operator

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

Ryan Brinkman

and compensate of understand some taking which material freight, -to - for are generally logistics, going is raw potential suppliers on suppliers Thanks we've commercial of discussed of forms question, due suppliers, such order calls Autoparts Hi. from for the I of earnings outside agreements least I [Indiscernible], production, this their as volumes etc. far and with for impact and non-commodity don't chain reimbursement my the labor, into contracts, historically have built control. think again, curtailing for for even to in shortage but for compensate On costs, which cancellations how some automakers they're coming suddenness quarter, anticipating other you seen increases at so of to the costs not magnitude lower these, inflation negotiations the forward attempting suppliers supply for to negotiate semiconductor typically automakers margin. factors for

of expect think in how about brunt and for you with you these margin these may to So bearing we suppliers there non-commodity may I GM? see conversations or be whether the costs, should just check wanted implications if proceed to

Paul Jacobson

is take conversations I whether consistency it's not any detail reduce making of having shot the to our at that that, seen a sure into to would in focus due singular obviously But I'll that on we supply have some go we've is, across logistics what chain, and we're going base. the say semiconductors, and volatility the Ryan, that any supply or etc.

while the now here inflationary working to do value the across-the-board the the aspects focusing to navigating So with all is challenges we're right short-term where But drive able is, of what through now our on ultimately and we business. counter to real operations. because have to that's of suppliers as efficiencies some the across business, working be

Ryan Brinkman

the rental companies your fleet of you pre had That's that reduced I my And -- of it you helpful. chain sales then the to profitability customers daily categories -pandemic particular. thinking Thanks. card view daily small follow-up sales you question longer-term, feeling etc.? about and between in commercial, sales. are the such question How earlier relative retail do is then customers a on between medium-sized Adam's fleet various businesses, last fleet of and different recall how to significantly prioritizing sales currently? retail, the where And in as and is with supply various attractiveness channels, rental,

Mary Barra

the BrightDrop. past, that are as discipline as traditional worked substantially though, the the the that in entering solutions car what mentioned aggressive we're perspective. held ICE mile good the rental rental then the fleet to business, from going to mile-last that and Not in be with had up past business reduce In been to has first a daily new business services or then to vehicles, itself we and what was we're actually the from profitable we're opening be offering, what but the in again, very today only and before perspective yes. Well, They least to so going think I that. and businesses, I from with there's frameworks

We're a there's interest so conversations and do maximizing think said, of going our is we I lot going profitability to As on. in EVs, the come. more with also long-term what of reach to and

Ryan Brinkman

Great. Thank you.

Operator

next Your Mark Sachs. the from of Delaney Goldman question comes with line

Mark Delaney

for very much thanks my Good taking morning questions. and

Software subscription industry auto focus Day. on on that lot connected a the basis, is Analyst services, something focusing the of spend at time big for is GM a especially a

talked should sort of expecting you year, think can we increases What target? billion from how XXXX investors that pretty backend weighted that a % linear to in of of you X about or Company margin. talk revenue billion to it increase year I years? And the be subscription-related XX few just target it to this guided billion XX see a as next be for this are And about you XXXX. where ramp over EBITDA you about -- XX target? is you the going by the is Can more

Paul Jacobson

morning good Hi, Mark.

As ramp of there, platform up we going to how really forward car lot the getting talked out in and build tied terms a we connected revenue about, to as EVs. park aggressively the growth time is that over we're of is which going Ultifi

still going OnStar growth the of see more the on we a we some that's be can a -- bit definition connected of at horizon as little by and going get So of to We back-loaded. certainly up little bit significantly as services that which the is but really second expect as into today we we the -- in growth baseline decade. rate half the we'd to the forward, tick look

Mark Delaney

and, demand think, Wholesales macroeconomic end we follow-up on and due in my talk look monitoring? when either is be to of the I is decline are just Thanks. your supply Or challenges. China changes need is the you the that to of chain And a supply? demand. Understood. wholesale or and some in it U.S. question the end about really indicators But down lot any you were to dealer channel network, at seeing

Mary Barra

products. of we everything the supply. we totally It able so are and enthused is can Where strong excited selling at what our due reaction all to to I'm sell. to

those reaction am we build see will more, vehicles. strong -- I as So have acceptance confident and of we we'll

Mark Delaney

Thank you.

Operator

next of Our from comes line with Holt. Tudor Pickering question the Matt Portillo

Matt Portillo

evolving business how accelerate demand and buyers, to the production is custom should incremental my CMD The And customer morning. was FedEx BrightDrop to over for follow-up given ask the orders on think we long-term margin about low vehicle as impressive What color helping a I and on question expand, by you margins growth basis questions. Good seeing provided next to revenue quite push TCO benefits we're thank XXs highlighted the you're and for at progression for hoping the our to on outlook segment. initial Verizon. long-term. years few taking wanted from business get backed streams a ramps bit revenue more how

Mary Barra

we there. information think quite our shared bit of I Matt, a goals Yes. on

key you but move in have don't we as give few milestones said, at more months, to to like BrightDrop, Paul of I forward anything the some look As in businesses next today. those we'll share

Matt Portillo

follow-up rolled this of out to a XXXX. then Okay. extremely hoping Supercruise XX being And range dig currently to and exciting vehicles you. know around just question. Thank for it's to Cruise, an the medium-term platform. year wider We by bit was a models Ultra outlook I is scaling my

and Just vehicle some your should that rails we Cruise higher and thinking point could what volume some the curious see guide of could you Ultra of launched about how at if we product lines? be provide roll-out in

Mary Barra

make With it get had Super market, we available on we Cruise what with that Cruise. it that the learned quite across that lessons faster scale we've portfolio quite all we've the done technology Super rapidly with retail or even that will than as

Matt Portillo

you. Thank

Operator

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

Mary Barra

for team, issues them. entire to our I the see of Great. all how Well, our proud your of every really of do hey, I agility, saying creativity with just the and suppliers. finding I opportunities of want GM thanks, In am part including questions. decisiveness, urgency, solving leveraging everybody end and Company, dealers and

years. key going as into last they partners are And move So fourth to strong are quarter see several that performance then confident I'm beyond. through very key consistent not improvements the only our why --.our it's to over we're and XXXX, we and

more, looking only We the Day to that not are our outlined as sharing about track the exciting and able products we'll we forward also our the strategy very that be part and offering, milestones performance. committed for of you growth Investor to to businesses to but be

for I us again, thank stays joining everyone hope today So I you and safe.

Operator

you call joining. today. concludes our That conference for Thank for

may You now disconnect.

General Motors (GM) 27 Oct 212021 Q3 Earnings call transcript