General Motors executives are monitoring President Trump's proposed tariffs on imports from Canada and Mexico, though the company is not planning significant changes to its North American strategy at this time.
The automaker has developed an "extensive playbook" of potential options but will not implement any changes until there is a "dramatic" shift in the global landscape and a permanent tariff structure is established, according to Chief Financial Officer Paul Jacobson during a conference call.
"We’ve been preparing for that and want to make sure that we are prudent and don’t overreact," Jacobson stated.
President Trump announced plans to impose a 25 percent tariff on goods from Canada and Mexico starting February 1, which could significantly impact G.M. and other automakers that manufacture vehicles and components in those countries, likely resulting in higher vehicle prices in the United States.
In 2024, G.M. produced nearly 900,000 vehicles in Mexico, the highest among automakers, with many vehicles, including the Chevrolet Silverado and GMC Sierra, being shipped to the U.S. G.M. also manufactures some vehicles in Canada.
During a separate conference call, G.M. CEO Mary T. Barra indicated that the company could increase production at U.S. plants and redirect trucks produced in Canada and Mexico to other markets instead of the U.S. "We have capacity in the United States to shift some of that," she said.
G.M. reported a loss of $3 billion in the last quarter of 2024, primarily due to a $4 billion noncash expense related to restructuring its joint venture operations in China, despite an 11 percent increase in revenue for the quarter.
For the full year 2024, G.M. reported a profit of $6 billion, down from $10.1 billion in 2023, with most profits originating from North America.
Jacobson projected net income for 2025 to be between $11.2 billion and $12.5 billion, excluding the potential effects of tariffs or other policy changes, and noted a modest decline in sales of internal-combustion vehicles anticipated for this year.
G.M. shares fell approximately 10 percent due to tariff concerns, with analysts warning that trade policies could negatively affect demand and profits.
In its earnings report, G.M. indicated progress in its electric vehicle segment, producing about 189,000 electric vehicles in North America last year, short of its 200,000 goal, and aims to produce around 300,000 in 2025.
The electric vehicle sector may also face challenges if tax incentives from the Biden administration are repealed or reduced, which could affect affordability and manufacturing incentives.
Barra emphasized the importance of a strong manufacturing sector and American leadership in advanced technologies in discussions with Congress and the White House, expressing confidence that G.M.'s diverse vehicle portfolio will enhance its U.S. market share.
Due to its robust performance in North America, G.M. announced bonuses of up to $14,500 for 46,000 United Automobile Workers union members employed at its U.S. plants.