General Motors CEO Mary Barra opened her Q1 letter to shareholders with gratitude, thanking "President Trump for his support of the U.S. automotive industry ." Yet just paragraphs later, she delivered the sobering news that the automaker expects to take a $4 billion to $5 billion hit from Trump's tariffs this year.
The nation's largest automaker is now walking a delicate tightrope – attempting to maintain positive relations with the president while candidly informing investors about significant financial challenges ahead.
"GM's business is growing and fundamentally strong as we adapt to the new trade policy environment," Barra assured shareholders, even as the company lowered its projected annual earnings before income tax to between $10-$12.5 billion, down from the $13.7-$15.7 billion estimated earlier this year.
The automaker had already taken the unusual step of pulling its 2025 profit guidance when reporting quarterly results earlier this week. CFO Paul Jacobson explained at the time that any prediction would be "a guess" given the uncertainty around tariffs.
Automaker has a strategy to weather Trump’s tariff storm
Despite the financial blow, Barra maintained an optimistic tone about ongoing discussions with the administration. "We look forward to maintaining our strong dialogue with the Administration on trade and other policies as they continue to evolve," she wrote.
In a CNN interview, Barra dismissed concerns about increasing vehicle prices. "We believe... pricing is going to stay at about the same level as it is," she said, adding that pricing "changes in our industry at least monthly, and sometimes more frequently."
The executive outlined various "levers" GM could pull to offset tariff costs, including increasing USMCA-compliant parts from suppliers, building more battery modules in the U.S., and ramping up domestic pickup truck production.
"We have excess capacity in the U.S. with the plants that we already have, so that allows us, if we want to make adjustments, we can do it," Barra told analysts on Thursday's earnings call.
The nation's largest automaker is now walking a delicate tightrope – attempting to maintain positive relations with the president while candidly informing investors about significant financial challenges ahead.
"GM's business is growing and fundamentally strong as we adapt to the new trade policy environment," Barra assured shareholders, even as the company lowered its projected annual earnings before income tax to between $10-$12.5 billion, down from the $13.7-$15.7 billion estimated earlier this year.
The automaker had already taken the unusual step of pulling its 2025 profit guidance when reporting quarterly results earlier this week. CFO Paul Jacobson explained at the time that any prediction would be "a guess" given the uncertainty around tariffs.
Automaker has a strategy to weather Trump’s tariff storm
Despite the financial blow, Barra maintained an optimistic tone about ongoing discussions with the administration. "We look forward to maintaining our strong dialogue with the Administration on trade and other policies as they continue to evolve," she wrote.
In a CNN interview, Barra dismissed concerns about increasing vehicle prices. "We believe... pricing is going to stay at about the same level as it is," she said, adding that pricing "changes in our industry at least monthly, and sometimes more frequently."
The executive outlined various "levers" GM could pull to offset tariff costs, including increasing USMCA-compliant parts from suppliers, building more battery modules in the U.S., and ramping up domestic pickup truck production.
"We have excess capacity in the U.S. with the plants that we already have, so that allows us, if we want to make adjustments, we can do it," Barra told analysts on Thursday's earnings call.
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