GM swings to $2.8 billion Q4 profit; warns chip crunch will hit earnings

DETROIT — General Motors posted net income of $2.8 billion in the fourth quarter, including an adjusted $2.6 billion profit in North America.

The gain compares to a $194 million loss a year earlier as a result of the UAW strike.

The profit brings GM's full-year net income to $6.4 billion, down 4.5 percent from 2019, the automaker said Wednesday.

Global revenue in the fourth quarter rose 22 percent to $37.5 billion and adjusted earnings before interest and taxes rose to $3.7 billion from $105 million a year earlier.

GM earned $283 million from its international regions, compared to a $120 million loss a year earlier, and China equity income was $248 million, up from $239 million.

Earnings from GM Financial more than doubled to $1 billion.

A global shortage of microchips will reduce 2021 earnings by $1.5 billion to $2 billion before interest and taxes, GM said, but it will not affect growth and electric vehicle initiatives. GM plans to prioritize production of full-size pickups, SUVs and EVs.

GM has idled three plants until mid-March and has been forced to build vehicles without certain modules at other factories, holding them until more chips come in.

CEO Mary Barra, in a media briefing, said GM "won't lose any production" of its high-profit full-size pickup trucks and SUVs, although the supply of computer chips "is still a bit fluid."

U.S. rival Ford Motor previously said it lost some production of its high-profit, top-selling F-150 pickup truck.

GM this week extended production cuts because of the chip shortage at plants in Kansas City, Kansas; Ingersoll, Ontario; and San Luis Potosi, Mexico, through at least mid-March. GM will build vehicles at plants in Wentzville, Missouri, and Ramos Arizpe, Mexico, but leave them incomplete for final assembly later.

GM's U.S. light-vehicle sales rose 4.8 percent in the fourth quarter, as retail sales began to reach pre-pandemic levels and redesigned full-size SUVs hit the market.

U.S. sales for the full year decreased 12 percent to 2.5 million vehicles. It marked GM's strongest fourth quarter on a retail basis since 2007. Retail deliveries increased 12 percent, the automaker said in a statement last month.

Full-year net income fell 4.5 percent from 2019 to $6.4 billion, and adjusted earnings before interest and taxes rose 15 percent from 2019 to $9.7 billion

Reuters and Bloomberg contributed to this report.