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Sale of Opel Unit Pushes GM into Third-Quarter Loss
General Motors Co. swung to a third-quarter net loss of $3 billion compared with a $2.8 billion net profit a year earlier, largely because of a $5.4 billion charge related to the sale of its Adam Opel unit to PSA Group.
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General Motors Co. swung to a third-quarter net loss of $3 billion compared with a $2.8 billion net profit a year earlier, largely because of a $5.4 billion charge related to the sale of its Adam Opel unit to PSA Group.
GM’s adjusted pretax earnings plunged 31% to $2.5 billion in July-September, driven by deliberate efforts to reduce dealer inventories in North America. Revenue from continuing operations, which excludes Opel, dropped 14% to $33.6 billion. Adjusted EBIT in North America fell to $2.1 billion from $3.6 billion.
The company’s unit wholesales to dealers and distributors, excluding Opel, totaled 2.23 million units compared with 2.12 million in the third quarter of 2016. A decline in wholesales in North America was offset by gains in China and South America. Worldwide retail sales slipped 3% to 2.32 million units.
GM cut year-on-year production in North America by 26% in July-September. That helped dealers in the U.S. reduce inventories by 160,000 units to a healthier 821,000 vehicles. Third-quarter sales in the region gained 1% to 924,600 units.
The company softened the impact of its third-quarter adjustments with a more profitable sales mix. The average retail transaction selling price for GM’s vehicles in North America exceeded $35,000—more than $4,000 above the industry average, according to the company.
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