GM Plans $2 Billion Cost Cut After Recording 2022 Revenue

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GM has record revenue of $14.5 billion in 2022 and total revenue of $156.7 billion, according to its newly released full-year financial report. The automaker also announced plans to cut costs by $2 billion over the next two years. It intends to make up 30 to 50 percent of those reductions by 2023.

“I want to be clear: We’re not planning any layoffs,” GM Chief Financial Officer Paul Jacobson said, according to Automotive News. “We are currently looking to hire the single most strategically important role, and we will use the reductions to help manage our overall headcount.”

Jacobson did not specify how many workers GM expected to cut. He also said the company will reduce product complexity and company costs to save money.

In 2023, GM anticipates slightly lower revenue of between $10.5 billion and $12.5 billion. It plans to maintain a 50 to 60 day supply of vehicles at dealerships, which is similar to its current 50 day inventory.

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“We think the underlying business will be pretty consistent in ’23 with what we saw last year, and I think that’s a slightly more bullish statement than most of the market,” said Jacobson.

EVs will be a big part of GM’s business in 2023. In a letter to shareholders, company CEO Mary Barra said: “We are accelerating production of the Cadillac Lyriq, GMC Hummer EV, and BrightDrop Zevo 600, and we will be launching exciting vehicles such as the Chevrolet Silverado.” EV, Blazer EV, and Equinox EV.”

To ensure it has battery materials, GM recently signed a $650 million supply agreement with Lithium Americas for material from its Thacker Pass mine in Nevada. It is the largest source of lithium in the US and the third largest in the world. At full production, sites must provide enough elements for one million EVs per year

“GM has secured all of the battery materials we need to build more than 1 million EVs annually in North America by 2025 and our future production will increasingly be based on domestic sources such as the site in Nevada we are developing with Lithium Americas,” the CEO Mary Barra said about the agreement.

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