General Motors says the worst global chip shortage is behind it
General Motors employees work on the assembly line at the Fairfax Assembly & Stamping Plant in Kansas City, Kansas on Friday, April 26, 2019. The Fairfax facility produces the Cadillac XT4 and the Chevrolet Malibu.
Jim Barcus for GM
General Motors believes the worst global chip shortage that forced automakers to cut production and shut down plants is over.
The company’s chief financial officer said this development has led to optimism that GM will meet its guidance for the year.
“In the past few weeks, when we’ve been talking about this being a volatile situation, we’ve actually seen the situation improving for us,” said GM Chief Financial Officer Paul Jacobson during a Wolfe Research conference on Wednesday afternoon. “At this point I would say that we are very confident that we can follow the instructions that we published on the street.”
GM announced earlier this month that it is expected to make $ 10-11 billion, or $ 4.50-5.25 per share, in adjusted pre-tax profits this year.
Adjusted free cash flow of $ 1 billion to $ 2 billion in 2021 is forecast for the Automotive division. The projections take into account the potential impact of chip scarcity, including an impact of $ 1.5 billion to $ 2.5 billion on free cash flow.
This is a developing story. Check for updates again.