Mary Barra, chair and chief executive officer of General Motors Co., during a news conference at the Hudson's building in Detroit, Michigan, US, on Mo
Mary Barra, chair and chief executive officer of General Motors Co., during a news conference at the Hudson’s building in Detroit, Michigan, US, on Monday, April 15, 2024.
Jeff Kowalsky | Bloomberg | Getty Images
DETROIT – General Motors on Thursday lowered its 2025 earnings guidance to include a possible $4 billion to $5 billion impact as a result of President Donald Trump’s auto tariffs.
The Detroit automaker said its new guidance includes adjusted earnings before interest and taxes of between $10 billion and $12.5 billion. That compares with its former guidance, which did not take tariffs into account, of $13.7 billion to $15.7 billion.
GM’s 2025 guidance also includes net income attributable to stockholders of $8.2 billion to $10.1 billion, down from $11.2 billion to $12.5 billion and adjusted automotive free cash flow of between $7.5 billion and $10 billion, down from $11 billion to $13 billion. The company did not change its capital spending target of between $10 billion and $11 billion.
“Importantly, GM’s business is growing and fundamentally strong as we adapt to the new trade policy environment, further strengthen our supply base, and drive EV profitability,” GM CEO Mary Barra said in a shareholder letter on Thursday.
The guidance takes into account “the positive impact” of the Trump administration’s changes this week to some tariffs that include reimbursing automakers for some U.S. parts and reducing the “stacking” of tariffs upon each other for the industry.
GM released first quarter results Tuesday that beat Wall Street’s expectations but delayed its investor call and updated guidance details amid expected changes to the auto tariffs.
Barra on Thursday told CNBC’s Phil LeBeau that the company is working to offset as much of the increased costs from tariffs as possible.
“Absolutely, we can make changes. We’ve been working on our supply chain since 2019, to be more resilient,” Barra said, citing a 27% increase in U.S. sourced parts. “We have a lot of opportunity as we continue to work with our supply base to increase the U.S. content. You’ll see more announcements from us now that we actually have this clarity to be able to reinvest in the U.S.”
Barra declined to say whether the company would shift production from plants in Mexico to the U.S. She said the company will utilize its current assets.
“We’re going to leverage that footprint that we have because we have the ability to add capacity to many of those plants. So we can do this efficiently, and it’s going to allow us to do this more quickly than if we were going to start with a with a greenfield,” Barra said.
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