GM’s second-quarter profit is 39% lower than 2021, cuts are possible

GM’s second-quarter profit came in about 39% lower than the same period last year as ongoing production disruptions due to supply chain problems and industry-wide semiconductor chip shortages continued.

With fears of a nationwide recession, GM assured Wall Street on Tuesday that it is already taking cost-cutting measures, such as rehiring new employees, and is ready to do more if needed.

GM reported second-quarter net income of $1.7 billion, compared to $2.8 billion in the same period last year. GM has seen continued strong demand for large pickups and large SUVs, which carry wide profit margins, and increased sales to fleet customers. As a result, GM’s net revenue for the quarter rose to $35.8 billion, compared to $34.2 billion a year ago.

In a letter to shareholders, CEO Mary Barra said the company’s outlook for the second half of the year is strong based on the belief that new vehicle production will improve and that GM will see a sharp rise in fleet orders. GM continues to expect its full-year adjusted earnings before interest and taxes to be between $13 billion and $15 billion.

But she cautioned that economic concerns were driving GM to take some cost-cutting measures.

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