GM CFO: global chip shortage is gradually improving

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Tencent technology news on February 25, GM executives believe that the situation of global chip shortage forcing automobile manufacturers to reduce production and close factories is beginning to improve, and believe that the company will achieve this year’s revenue target.
“In the past few weeks, when we talk about this as a turbulent situation, we actually see that the situation has improved for us,” Paul Jacobson, GM’s chief financial officer, said at the Wolfe Research Conference on Wednesday afternoon. At this point, we are very confident that we can meet the performance guidelines issued to Wall Street. ”
At the beginning of this month, GM said it expected adjusted pre tax profit this year to reach $10 billion to $11 billion, or $4.50 to $5.25 per share. The company also expects the auto sector’s adjusted free cash flow to be between $1bn and $2bn this year. These forecasts take into account the potential impact of the chip shortage, including a $1.5 billion to $2.5 billion impact on its free cash flow. The impact of the chip shortage is still there, because GM is coping with this situation, and even can only partially produce some high demand cars.
Said Jacobson. “We are more confident now than we were two weeks ago.”
GM’s car factories in Kansas, Canada and Mexico will shut down until mid March due to a shortage of chips. The automaker said it would give priority to its “most popular products – including full-size trucks, SUVs and Corvette supercars,” which are also its most profitable models.
Alixpartners, a consultancy, predicts that chip shortages will cost the global auto industry $60.6 billion this year. This estimate covers the entire supply chain – from dealers and automakers to large suppliers and their smaller counterparts. At the end of last year, automakers and parts suppliers began to warn of shortages after demand rebounded more strongly than expected. Last spring, novel coronavirus pneumonia was forced to stop production to help curb the new crown pneumonia pandemic.
Semiconductor chips are extremely important components of new vehicles, used in infotainment systems and more basic components, such as power steering and braking. Experts say that depending on the vehicle and its choice, a vehicle may have hundreds of semiconductors. (compiled by Tencent technology / Wuji)