Chapter 1: What is the main topic discussed in this episode?
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Let's turn back to earnings. Shares of General Motors jumping after the company beat earnings and raised guidance. The GM, CFO Paul Jacobson joins us now for more. Paul, the stock is up by more than 9%. We'll spend some time talking about the numbers, but I just wanted to take a step back with you just for a brief moment. You've got real experience.
navigating volatile industries, experience in the airline business and experience in the automaker business too. You took over as CFO in the pandemic. Can you talk to us about this year, Paul, just how agile have you and the team needed to be and how volatile have things been too?
Well, Jonathan, first of all, thank you very much for having us. It's a great day to be at GM and celebrate the success of all of our employees and partners worldwide. So really appreciate you being here today, having me today. So, you know, at the end of the day, it's just another change.
I mean, since coming to GM in 2020, we've gone through COVID, we've gone through chip shortage, we've gone through tariffs. We've gone through EV pivots and so on. But what we've really tried to do is create a model that is resilient.
And when you look at our balance sheet, you look at our inventory discipline and the way we've gone to market, there's a lot of things that have changed that allow us to be able to react to the world around us faster. And I think that's paved the way for us to have another really strong year in the face of a lot of macro changes.
Paul, in order to increase resilience and maybe agility, do you have to sacrifice long-term planning? Is that something that becomes harder?
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Chapter 2: What challenges has GM faced since the pandemic?
And I think it's that proactive partnership in terms of really making sure that we can remain competitive and help to drive more investment into the U.S., which we've done.
So do you expect more reprieves, especially as the U.S. goes into negotiations next year with Mexico and Canada?
Well, I think what we're looking for is a little bit of stability. Obviously, this year has been a bit of a transition year. You know, for us, the handshake deal that we have with Korea, we're really eager to get that finalized. We do have some production of some of our lower cost models. in Korea that help with some of the affordability concerns of our consumers here in the US.
But also obviously Mexico and Canada are going to be really important to us. But as we look at those deals being finalized and we start to look into 2026, we think that there's actually an opportunity for us to do better in 2026 than we've done in 2025. and start to work our way back up to those 8% to 10% targeted margins that we set for ourselves before the tariffs were put in place.
Paul, just finally, can we stay in Asia and finish on China? Paul, for a long time, we've said on this program, this must be the most competitive market on the planet in any industry. How difficult is it to operate in that country right now? And how much harder is it going to get in the future for U.S. automakers like yourself?
About a year ago, Jonathan, we undertook a pretty ambitious restructuring program in China with the realization that we were probably not going to be as big in China as we have been historically going forward with the amount of just tremendous competition that's in the country. going forward.
But together with our partners, we were able to restructure that business and we've been profitable every quarter this year and look to be able to sustain that. So it's really about making sure that we're right size for where we are. We've got great products over there. We've got a long legacy and we've got a good partnership that I think has really paved the way.
And with that work that the team did in China, really proud of what they accomplished and think we can be sustainable there.
Paul, appreciate your insight and your experience as always, sir.
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