GM posts $8.1B profit; offer up to $10,750 in profit sharing

DETROIT -- General Motors posted an $8.1 billion net profit for 2018, fueled by better prices for vehicles sold in the U.S., its most lucrative market.

The automaker made $10.8 billion before taxes in North America, down about 9 percent from 2017. But it still means big profit-sharing checks for about 46,500 union workers in the U.S., including those at GM's plant in Lordstown. They'll get up to $10,750 each, less than last year's $11,500.

It's money in years past that was looked upon as a potential stimulus to the local economy, but no so much anymore as local employees brace for the plant's idling in March.

"I think people are probably going to save the money, maybe put it into the bank, or for the ones that are transferring, they may have to buy a new home at their new location, so they may use it for a down payment," said Timothy O'Hara, vice president of United Auto Workers Local 1112.

"In the past, the money got put back into the local economy, people purchased something, even a big ticket item," O'Hara said. "But due to the situation this year, for the most part, it may not be the case."

Since profit sharing began in 2010, eligible employees have earned more than $80,500 in profit-sharing payments. The latest payment will come in the Feb. 22 paycheck.

The profits are being announced as GM lays off about 4,300 white-collar workers, many of them at its giant technical center in Warren, Mich. The company plans to close five U.S. and Canadian factories, including Lordstown, and eliminate a total of 14,000 salaried and blue-collar jobs as part of a giant restructuring to boost profit margins, prepare for a downturn and invest more in electric and autonomous vehicles.

GM wanted to cut 8,000 white-collar workers. About 2,200 took retirement offers, and the company let go of another 1,500. This week, GM started telling 4,300 other salaried workers that they were out of a job.

The company plans to eliminate about 6,000 factory worker jobs by closing three car assembly plants and two other factories. But it says there are 2,700 openings for U.S. workers at factories across the nation.

The last day for workers at the Lordstown facility, where the Chevrolet Cruze is produced, is March 8.

The company said Wednesday that it made $5.58 per share for the year. Without $2.5 billion worth of special items largely due to restructuring, the profit was $6.54, easily beating Wall Street expectations of $6.29, according to a survey by FactSet.

Full-year revenue rose 1 percent to $147.05 billion, also beating estimates of just over $145 billion.

GM made $2 billion, or $1.40 per share in the fourth quarter. Excluding restructuring charges, the company's per-share earnings were $1.43, also breezing past Wall Street expectations of $1.24.

Shares of GM rose 1.4 percent.

Chief Financial Officer Dhivya Suryadevara said GM said it made $2 billion on its joint venture in China last quarter, despite slowing auto sales in the country.

The Trump administration's tariffs on imported aluminum and steel raised prices of those commodities, costing the company more than $1 billion last year. Suryadevara expects another $1 billion increase this year.

"It's a volatile environment as you well know, and we're going to have to see how that goes," she said.

GM has managed to offset some costs with efficiencies, she told reporters Wednesday.

For the full year, GM made $423 million pretax from its international operations, about one third of the $1.3 billion from a year earlier. GM Financial, the company's lending arm, earned $1.9 billion, almost 60 percent more than in 2017. Cruise Automation, GM's autonomous vehicle unit, lost $728 million, 19 percent more than a year earlier. The company expects to spend $1 billion on Cruise this year, and CEO Mary Barra predicted a profit on autonomous vehicles early in the next decade.

GM thinks that it will outpace last year's performance in 2019. Suryadevara said she expects an adjusted profit of $6.50 to $7 per share.

Even with the profit, GM's U.S. sales last year fell 1.6 percent as big SUVs and the company's top-selling Chevrolet Silverado pickup truck faltered during the fourth quarter. But sales of many smaller SUVs rose and the average sale price of a GM vehicle hit a record of $36,974, the company said. GM's U.S. market share fell 0.4 percentage points to 16.7 percent.

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