Becker Private Equity & Business Podcast
General Motors, Please Don’t Get Wobbly on Us: 5 Key Points 1-29-25
Wed, 29 Jan
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In this episode, Scott Becker examines General Motors’ recent $2.9 billion loss, record pre-tax profits, and the rising average car price of $50,000.
Chapter 1: What are the key points about General Motors?
This is Scott Becker with the Becker Private Equity and Business Podcast. Today's discussion is General Motors. Please don't go wobbly on me. Five key points. So here's the deal with GM. GM gets constantly watered for the great leadership of Mary Barra and so forth. And God bless her. But here's the reality of what's going on.
Chapter 2: How did General Motors report a $2.9 billion loss?
Chapter 3: What are the implications of GM's record pre-tax profits?
First, they had a $2.9 billion fourth quarter loss due to restructuring some plant closures that they tried to put the best possible spin on it. They said in the press release they had record pre-tax profits of nearly $15 billion, excluding one-time items. Now, one-time items.
Charlie Munger, who is the brilliant partner of Warren Buffett, always said, beware of people that talk to you about one-time items. Because one-time items find a way to be other kinds of one-time items that still mess up profitability. Followers of corporate Americans, that's their point, realize that one-time items often find ways to be not one-time items. Four, true net income fell 41%.
So that's, you know, you could talk about whatever you want, but talk to me about cash flow and net income. And that fell 41%. The fifth thing, and when you think about GM, you don't think about this. I always thought of GM as a mid-value brand almost. The average price of a car sold at GM this last year is $50,000. Who the heck saw that coming? Again, GM, General Motors, don't get wobbly on us.
Five key points. Thank you for listening to the Becker Private Equity and Business Podcast.