General Motors was able to circle the wagons and beat back the full brunt of the coronavirus pandemic during the second quarter, solidly outperforming the gloomy outlook forecast by Wall Street.
With factories shuttered for two months and sales sagging to Great Recession levels, GM lost $800 million for the quarter, working out to a loss of 50 cents a share. But the consensus forecast among analysts surveyed by Zacks Investment Research called for a deficit of $1.72 a share. By comparison, the largest of the Detroit automakers reported a $2.42 billion profit, with earnings per share of $1.64, during the April-June quarter of 2019.
“This demonstrated the actions we’ve taken over the last few years to be more resilient to reduce our fixed costs, and to lower our breakeven point and really improve our earnings power so we can invest in our future,” said Chief Financial Officer Dhivya Suryadevara in a media conference call.
The relatively modest loss for the quarter was all the more significant considering revenues for the three months tumbled more than 53%, to $16.78 billion, compared with $36.1 billion the year earlier.
The downturn might have been even worse but for the fact that the market in China – where the coronavirus pandemic first emerged – was hit hardest during the first few months of the year and was already beginning to recover by the second quarter, noted Suryadevara.
Meanwhile, GM was able to cut spending and take other actions in order to keep its deficit in the home North American market to a relatively modest $100 million, the CFO told reporters Wednesday morning.
Nonetheless, the pandemic has had a significant impact on the Detroit carmaker, forcing it to take aggressive actions to prop up its balance sheet, among other things, lining up a $16 billion revolving line of credit as it burned through $8 billion in cash for the quarter.
Suryadevara offered a cautious bit of “color” for the second half of the year, declining to offer specific guidance at a time when the COVID-19 outbreak is still far from under control. But she said she expects GM will be able to “offset a large portion of the first half (cash) burn,” and pay down most or all of what it borrowed from the revolving credit line.
GM’s relatively solid performance can be seen in light of what Wall Street had been anticipating. This was, for GM, likely to be “the toughest (quarter) in modern history,” said Bank of America Merrill Lynch analyst John Murphy, ahead of the automaker’s earnings release.
Competitors are just beginning to weigh in with their results. In Japan, Mitsubishi fell deep into the red, as did Nissan, the larger automaker on Tuesday warning it expected to lose a total of $4.5 billion for the fiscal year ending next March. Tesla earlier this month delivered a surprise profit for the second quarter. That was partially driven by sales in China where it opened a new assembly plant late in 2019, but was also fueled by ongoing sales of zero-emissions credits to other automakers.
The industry, as a whole, is in an uncertain period, with no clear end to the pandemic in sight. GM has been able to keep its factories running by enacting strict guidelines to minimize the risk of infection among workers. Even so, it is only slowly rebuilding inventories sorely depleted during the two-month North American factory shutdown that began in March.
That’s been particularly problematic when it comes to the full-size pickups and the SUVs that helped prop up the automaker during the most recent quarter. GM has “recovered a portion of” its inventory, and is “slowly building this back up,” said Suryadevara, though it is not likely to be back to normal levels of inventory in North America, she said, until the end of the year.
The steps GM took to prop up its balance sheet during Q2 will be particularly important going into the second half of the year, she added, noting that the company is moving aggressively ahead with both its battery-electric vehicle and autonomous vehicle programs. The automaker plans to have more than 20 BEVs in production by 2023, a schedule it says it intends to hold to. The next long-range model in its line-up to take a bow is the Cadillac Lyriq which will be unveiled during an online event on Aug. 6.
What actually happens in the months ahead is far from certain and could depend on whether there is a second wave of the COVID-19 pandemic. Global car sales are expected to be down by 20%, even under the best-case scenario, according to LMC Automotive. Meanwhile, industry analysts generally expect U.S. sales to come in somewhere between 13 million and 14 million – down from 17.1 million in 2019 — though that could dip as low as 12 million, J.D. Power and others have warned, if the crisis forces new rounds of shelter-in-place orders, factory closures and other hits to the economy.
ALYI Highlights Next Steps
Dallas, TX – October 20, 2020 – OTC PR WIRE – Alternet Systems, Inc. (OTC PINK: ALYI) today announced plans to publish a comprehensive progress update next week targeting a Wednesday, October 28th release date.
Management indicates a number of major endeavors underway in important stages of development to include RevoltTOKEN financing partner’s efforts to finalize ICO details, next steps after finalizing the multiparty milestone agreement announced last week, and a new design path development for the company’s long-term plans for future electric vehicles in Africa.
Management anticipates wrapping up details on the above-mentioned endeavors by next Wednesday and being ready to release a comprehensive update.
For more information and to stay up to date on ALYI’s latest developments, please visit www.alternetsystemsinc.com.
Disclaimer/Safe Harbor: This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the Company’s current views with respect to future events that involve risks and uncertainties. Among others, these risks include the expectation that any of the companies mentioned herein will achieve significant sales, the failure to meet schedule or performance requirements of the companies’ contracts, the companies’ liquidity position, the companies’ ability to obtain new contracts, the emergence of competitors with greater financial resources and the impact of competitive pricing. In the light of these uncertainties, the forward-looking events referred to in this release might not occur.
Alternet Systems, Inc. Contact:
GM Debuts Even Quicker Fourth-Generation Magnetic Ride Control
It’s been almost 20 years since Cadillac first introduced their nifty MagneRide technology on the Cadillac STS Seville, and, at the time, was pretty groundbreaking stuff, offering technology that would adjust and adapt suspension components of a vehicle in real-time in response to changes in terrain. Now on its fourth generation, MagneRide 4.0 gets a number of substantial upgrades across the board making it, in Cadillac’s own words, the world’s fastest reacting suspension technology. And with up to 45% faster damping response than the third generation, we kinda believe that claim.
According to Cadillac, these are the most dramatic changes yet to the MagneRide system yet, and will elevate the driving performance and road-going comfort of the 2021 Cadillac CT4-V, CT5-V, CT5 Sport, and Escalade. “With MagneRide 4.0, the world’s fastest reacting suspension system is now even faster,” said Thomas Schinderle, Cadillac vehicle performance engineer. “When paired with our sedans’ award-winning rear-wheel-drive architecture, the result is two of the most responsive sport sedans on the market, with reflexes that elevate the already high threshold of the V-Series legacy.”
MagneRide is an active damping system that literally uses electromagnets and magnetorheological fluid to help vary the damping rate of the shock absorbers. Wheel accelerometers read the road up to 1,000 times a second, triggering adjustments in the magnetic charge in the fluid. This fluid then adjusts the shocks almost instantly, allowing the vehicle to better respond to different road surfaces and corners, maximizing the traction on the road at all times.
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Every facet of the previous MagneRide system was improved to create version 4.0, with new wheel hub accelerometers, an inertial measurement unit that processes changes four times faster and is more precise, new temperature maps for the fluid, new flux control to provide more consistent and more accurate changes between rebound and compression, reduced damper friction for more pronounced differences between drive modes, and new software and hardware to help the vehicle remain more level when transitioning through corners.
MagneRide 4.0 comes standard on the 2021 Cadillac CT4-V in rear-wheel drive and CT5-V and starts at $45,8901 and $48,7901, respectively. The 2021 CT5 Sport can get MagenRide 4.0 as part of an optional V Performance Package, plus suspension performance upgrades and a mechanical limited-slip diff. The 2021 Cadillac Escalade will have MagneRide 4.0 on the Sport and Platinum models as standard, which starts at $86,8901 and $101,2901, respectively. The Premium Luxury trim may get MagneRide 4.0 as part of an optional Performance Package.
BMW Gives Android Auto, Other Freebies To 750,000 Owners In OTA Update
In 2012, Wired reported that Tesla would deliver the auto industry’s first over-the-air (OTA) update to more than 100 Model S sedans. Fast forward to 2020, and BMW has announced it’ll deliver a free OTA update to more than 750,000 cars in markets worldwide. BMW OS 7 and the Remote Software Upgrade tech allow the automaker to update existing features while introducing completely new ones, like adding wireless Android Auto for the first time.
Google’s in-car connectivity software joins Apple CarPlay that has already been available in BMW models, though there’s a lot more included in the update. BMW is updating its proprietary map software for an “entirely new navigation experience.” BMW says its cloud-based system can calculate routes faster by combining real-time info with forecast models. Even CarPlay gets some love with turn-by-turn directions and lane information that’s now viewable in the head-up display. Oh, and there’s no mention of an Android Auto subscription.
BMW’s other new features try to make the driving a bit less frustrating. BMW’s Connected Parking, which helps drivers find parking spots and shows the probability of a spot being open, can now consider the vehicle’s size when assisting. BMW’s eDrive Zones can automatically switch the vehicle to its pure electric driving mode through geofencing. So far, 90 European cities have established such zones. Even BMW’s Intelligent Personal Assistant is a bit smarter, distinguishing between whether the driver or passenger is speaking.
OTA updates for cars didn’t exist a decade ago. But today, BMW, Ford, GM, and others are offering it, or they will be offering it soon. It is just one example of how pure vehicles are changing, highlighting their rapid digitalization and increased connectivity, enabling a host of new and interesting features. Pair that with electric vehicles, and you have a rapidly changing automotive landscape. All you have to do is download it.
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