General Motors executives said Tuesday that tariff concerns impacted the first quarter only marginally as profits fell 6.6%, but continued uncertainty around President Donald Trump’s import taxes will lead GM to revise its prior full-year guidance.
The Detroit automaker said production hurdles with full-size pickups and SUVs and other headwinds in North America dragged down earnings in the period ending March 31, although its U.S. sales rose and it swung to a profit in China.
GM is the first of the Detroit Three to report earnings for first quarter of 2025. Chief Financial Officer Paul Jacobson told reporters on a call that GM would not comment on the cost incurred from tariffs beyond that it impacted the company for only a few days.
Trump signed an executive order to implement a 25% tariff on foreign-built vehicles built starting April 3, with a few key auto-parts subject to a tariff starting May 3. Reciprocal tariffs, also announced April 2, started at 10% on U.S. trading partners. Exactly one week later, he paused most of them for 90 days.
Still, GM’s prospects for the year’s profitability provided earlier this year did not account for tariff concerns, Jacobson said. The company said in a statement later that it will issue revised guidance later this week.
GM’s newly hired CFO Paul Jacobson joins the automaker from Delta.
“We did have some minimal costs related to tariffs in the quarter. It’s pretty minor across the board,” he said. “We can’t rely on the guidance we have issued before, because it might be material.”
GM said in January that it expected net profits in the range of $11.2 billion to $12.5 billion for full-year 2025, and pretax profits of $13.7 billion to $15.7 billion.
Those ranges excluded impact from increased tariffs or other policy changes under the Trump administration but assumed a stable policy environment in North America and an estimated benefit of $500 million from reduced year-over-year expenses of its autonomous Cruise business.
The prior financial guidance also included anticipated capital spending of $10 to $11 billion accounting for investments in the company’s battery cell manufacturing joint-ventures.
The company has already moved on its playbook devised ahead of tariffs, including the announcements increasing production at the Fort Wayne Assembly Plant in Indiana by 50,000 more vehicles per year. The Fort Wayne facility builds the Chevrolet Silverado 1500 and GMC Sierra 1500 light-duty trucks.
Further strategies may be employed, Jacobson said, but would not be made before obtaining clarity on the tariff situation.
The Wall Street Journal, citing unnamed sources, reported that Trump is expected to “soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs he has imposed and easing some levies on foreign parts used to manufacture cars in the U.S.” The Journal also said, “The move would be retroactive … meaning that automakers could be reimbursed for such tariffs already paid.”
GM CEO Mary Barra voiced support for the policy change in a statement provided to the press. GM rescheduled its earnings call to Thursday, May 1.
“We’re grateful to President Trump for his support of the U.S. automotive industry and the millions of Americans who depend on us. We believe the President’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy,” Barra said. “We appreciate the productive conversations with the President and his Administration and look forward to continuing to work together.”
In a March memo to employees obtained by the Detroit Free Press, GM told employees to remain focused on their work and disciplined in their company spending.
“We are now identifying potential impacts by supplier, vehicle program, plant and other factors, and working through what we need to do and when,” the memo read. “We are in a strong position to navigate this dynamic situation and will continue to deliver for our customers, employees, and communities. Each of us can contribute by staying focused and delivering on plans for this year, maintaining a disciplined approach and managing discretionary costs.”
GM reported vehicle sales increased 17% in the quarter, likely customers hurrying to buy before tariffs took effect, though Jacobson noted strong sales continued into April.
However, a fire at ITW, a Mexican-based plant that supplies plastic parts used in seatbelt retractors, slowed production during the quarter, a company spokesman said. This harmed wholesale volumes of light duty full-size trucks, which declined year-over-year.
Several weeks of scheduled down time at full-size truck plants for upgrades also had an impact.
“The team managed that disruption well, and we’re recovering those units,” Jacobson said.
Other headwinds, such as a foreign exchange headwind of $300 million due to weakness in the Mexican peso — also impacted the Detroit automaker compared with last year at this time, when strong retail sales of gasoline-powered pickups and SUVs, lower raw material costs and improved production of battery cell modules led to higher earnings. The car company’s costs were also up $400 million due to higher depreciation and amortization, warranty pressure and higher labor costs, Jacobson said.
Meanwhile, GM’s China business improved significantly from last year. GM spent much of 2024 fixing its business in China, its second most important market behind the United States. GM’s business has been under pressure there for several years now due to a rapid rise in electric vehicles, increased regulations and new domestic competitors entering the market.
Here are the numbers:
Net profit of $2.7 billion, down 6.6% from prior year’s quarter of $2.9 billion.
Total revenues of $44 billion, up 2.3% from $43 billion.
GM closed the quarter with a stock value of $47.03 per share. On the last day of first-quarter 2024, the company’s stock was valued at $44.99 per share.
Notable Figures: During the quarter, the company’s equity income in China produced a $45 million profit, compared to a loss of $106 million last year at this time.
Pretax profits of $3.4 billion marked a 9.8% decline compared with $3.8 billion in first-quarter 2024.
Senior autos writer Jamie LaReau contributed to this report.
Jackie Charniga covers General Motors for the Free Press. Reach her at jcharniga@freepress.com.
This article originally appeared on Detroit Free Press: GM first-quarter profits slip, though tariffs had only ‘minor’ impact
