{"id":119318,"date":"2021-08-04T16:54:26","date_gmt":"2021-08-04T16:54:26","guid":{"rendered":"https:\/\/fin2me.com\/?p=119318"},"modified":"2021-08-04T16:54:26","modified_gmt":"2021-08-04T16:54:26","slug":"chip-shortage-slams-auto-industry","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/chip-shortage-slams-auto-industry\/","title":{"rendered":"Chip shortage slams auto industry"},"content":{"rendered":"<p><cite>New York (CNN Business)<\/cite>General Motors&#8217; earnings fell short of Wall Street forecasts \u2014 but the company expects better results in the second half of the year, even with continued chip shortages and rising raw material costs.<\/p>\n<p>GM, the nation&#8217;s largest automaker, reported Wednesday a record adjusted pre-tax profit of $4.1 billion for the second quarter. But adjusted pre-tax earnings of $1.97 per share fell short of the $2.23 estimate from analysts surveyed by Refinitiv.<br \/>\nPart of the problem: GM&#8217;s warranty and recall expenses jumped by a shopping $1.3 billion in the quarter. That included $800 million set aside to replace the batteries in 61,000 models of its electric Chevrolet Bolt because of a fire risk. Increased commodity prices didn&#8217;t help either.<\/p>\n<ul><\/ul>\n<p>Shares of <span>GM<\/span> <span>(<span>GM<\/span>)<\/span>, which had risen 39% year to date through Tuesday&#8217;s close, fell 7% in early trading Wednesday.<\/p>\n<ul><\/ul>\n<p>On the positive side, GM&#8217;s $34.2 billion in sales easily topped Wall Street&#8217;s estimates. <\/p>\n<p>GM also raised its guidance for the second half of the year, saying it expects adjusted pre-tax earnings of between $11.5 billion and $13.5 billion \u2014 up from its previous outlook of between $10 billion and $11 billion. GM also raised its earnings per share forecast for the same period.<br \/>\nThat&#8217;s despite the computer chip shortage that has hampered production of cars across the industry and forced temporary production halts at some factories. GM acknowledged the situation &#8220;remains fluid&#8221; and that &#8220;overall supply chain challenges continue.&#8221;<br \/>\nGM also said it expects higher commodity prices will cost the company between $1.5 billion and $2 billion more in the second half of the year compared to the first half.<br \/>\nDemand for new cars has been exceptionally strong this year, particularly in the United States. The company sold 1.8 million vehicles worldwide in the second quarter, despite the limitations on production caused by the chip shortage. <\/p>\n<ul><\/ul>\n<p>That&#8217;s an increase of 300,000 vehicles compared to the second quarter of 2020, when the pandemic and stay-at-home orders shut factories and dealerships and greatly reduced sales. But it&#8217;s 200,000 fewer vehicles than GM sold in the same quarter of 2019 before the pandemic.<br \/>\n<img decoding=\"async\" alt=\"GM shareholders have never had it this good\" class=\"media__image\" src=\"\/\/cdn.cnn.com\/cnnnext\/dam\/assets\/210612095040-july-2019-mary-barra-large-169.jpg\"><br \/>\nWhile prices of both new and used car prices have reached record levels, that&#8217;s more beneficial to GM dealerships \u2014 which are independently owned \u2014 than to GM itself. The company did benefit from having to offer fewer incentives to buyers to purchase cars, and in the value of the used vehicles it took back when leases expired.<br \/>\nSource: <a href=\"https:\/\/edition.cnn.com\/2021\/08\/04\/business\/gm-earnings\/index.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>New York (CNN Business)General Motors&#8217; earnings fell short of Wall Street forecasts \u2014 but the company expects better results in the second half of the [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":119317,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Chip shortage slams auto industry - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/business\/chip-shortage-slams-auto-industry\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chip shortage slams auto industry - Fin2me\" \/>\n<meta property=\"og:description\" content=\"New York (CNN Business)General Motors&#8217; earnings fell short of Wall Street forecasts \u2014 but the company expects better results in the second half of the [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/business\/chip-shortage-slams-auto-industry\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-08-04T16:54:26+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/08\/Chip-shortage-slams-auto-industry.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/business\/chip-shortage-slams-auto-industry\/\",\"url\":\"https:\/\/fin2me.com\/business\/chip-shortage-slams-auto-industry\/\",\"name\":\"Chip shortage slams auto industry - Fin2me\",\"isPartOf\":{\"@id\":\"https:\/\/fin2me.com\/#website\"},\"datePublished\":\"2021-08-04T16:54:26+00:00\",\"dateModified\":\"2021-08-04T16:54:26+00:00\",\"author\":{\"@id\":\"https:\/\/fin2me.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\"},\"breadcrumb\":{\"@id\":\"https:\/\/fin2me.com\/business\/chip-shortage-slams-auto-industry\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/fin2me.com\/business\/chip-shortage-slams-auto-industry\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/fin2me.com\/business\/chip-shortage-slams-auto-industry\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/fin2me.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Business\",\"item\":\"https:\/\/fin2me.com\/category\/business\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Chip shortage slams auto industry\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/fin2me.com\/#website\",\"url\":\"https:\/\/fin2me.com\/\",\"name\":\"Fin2me\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/fin2me.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/fin2me.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\",\"name\":\"Mark\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fin2me.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/39b72719fb75a2d3c7d7695026648602?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/39b72719fb75a2d3c7d7695026648602?s=96&d=mm&r=g\",\"caption\":\"Mark\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Chip shortage slams auto industry - Fin2me","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/fin2me.com\/business\/chip-shortage-slams-auto-industry\/","og_locale":"en_US","og_type":"article","og_title":"Chip shortage slams auto industry - Fin2me","og_description":"New York (CNN Business)General Motors&#8217; 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