GM reports profits down but still $6B despite pandemic

DETROIT — General Motors’ profit fell 4.5% in 2020, but a strong second half more than offset the effects of pandemic-related factory closures and a costly air bag recall.

The Detroit automaker said Wednesday it made $6.43 billion as demand for its vehicles surged late in a year dominated by coronavirus upheaval. In the fourth quarter, the company made $2.85 billion.

After GM’s North American factories reopened in May, the company ran many of them flat-out but couldn’t make up all the lost production. As customers returned to buying again, inventory was short and GM’s U.S. sales for the year fell 12% from 2019. But because buyers bought more expensive trucks and SUVs and loaded them with options, the company was able to turn a big profit.

Even with the strong performance, GM shares fell 4.4% in midday trading, largely because of cautious company guidance about a semiconductor chip shortage that’s affecting the whole auto industry. GM predicted the shortage will cost it $1.5 billion to $2 billion in earnings before taxes this year due to lost production. Still, GM expects pretax income for the year of $10 billion to $11 billion, or $4.50 to $5.25 per share.