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Speaker 1: The headline from General Motors in the last couple of hours, Tom,

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Speaker 1: raising their profit target for the year by at least

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Speaker 1: a billion dollars.

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Speaker 2: Aina, Rice, Yeah, I remember John when you whispered to

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Speaker 2: me somewhere in May of twenty twenty General Motors, Tom,

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Speaker 2: General Motors, you've got to do it twenty to sixty,

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Speaker 2: and then a challenge last year to say the least,

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Speaker 2: and now ebbing and flowing you thirty five to forty.

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Speaker 2: It has been a challenge for General Motors, including all manufacturers,

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Speaker 2: through the pandemic, and now they look to profitability. Joining

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Speaker 2: us as chief financial officer driving the financial ratios at

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Speaker 2: the complexities of the future of General Motors. Paul Jacobson

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Speaker 2: joins us this morning. Paul defined profitability. We're in the

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Speaker 2: income statement. Are you zeroed in on on profitability out

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Speaker 2: twenty four months out five years for General Motors?

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Speaker 3: Well, good morning, Tom, and thanks again for having us.

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Speaker 3: It's always always a pleasure to be with you, especially

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Speaker 3: on a daylight today where we're announcing the tremendous results

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Speaker 3: that the GM team put forward, and I just want

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Speaker 3: to extend a great big thanks to them worldwide for

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Speaker 3: the results that they posted during the quarter. You know,

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Speaker 3: when we're looking at when we're looking at profitability, you know,

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Speaker 3: it's a whole range of outcomes. Obviously, ebit matters. But

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Speaker 3: one of the things I think we've been really focused on,

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Speaker 3: and I think it's worked for us, is the combination

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Speaker 3: of market share and margin and growth. So the end

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Speaker 3: of the day, it's not just about producing and selling

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Speaker 3: more vehicles. It's about making sure that we're maintaining and

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Speaker 3: expanding our margins going forward. And when you look at

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Speaker 3: the track record that we've had, especially over the last

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Speaker 3: six months, but really over kind of the last six quarters,

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Speaker 3: the team's done an amazing job producing vehicles that customers demand,

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Speaker 3: and you know, our biggest challenges we can't get them

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Speaker 3: fast enough. But customers have really responded and we really

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Speaker 3: appreciate that.

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Speaker 2: Okay, that's right where I want to go, and that

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Speaker 2: there's a shortage of you know, there's always in every

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Speaker 2: company four or five vehicles.

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Speaker 4: Everybody wants the same car.

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Speaker 2: Do you have a lot of pricing flexibility now to

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Speaker 2: twenty twenty four?

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Speaker 4: Can you raise prices?

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Speaker 3: Well, I'm not sure that we're going to be able

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Speaker 3: to raise prices across the board, but one of the

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Speaker 3: things that we've seen that has really manifested itself is

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Speaker 3: customers demanding higher trim levels. In fact, we created over

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Speaker 3: the last eighteen months the Denali Ultimate, which was a

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Speaker 3: higher end trim level than our high end Denali on

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Speaker 3: the GMC Yukon's in response to customers wanting them. And

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Speaker 3: now what we see when we look at our trucks

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Speaker 3: in our SUVs, about seventy to seventy five percent of

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Speaker 3: them are being priced at premium levels where customers are

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Speaker 3: demanding that. So I think we've done a good job

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Speaker 3: of responding to where customer demand is and what they're

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Speaker 3: looking for in our products. As far as the core prices,

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Speaker 3: obviously the business is really competitive. We've focused on price

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Speaker 3: stability and I think I think our results show that

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Speaker 3: we've done a good job of that.

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Speaker 4: John a pickup truck.

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Speaker 2: This used to be, you know, you wanted an old

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Speaker 2: GM pickup truck that you could drive around with your

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Speaker 2: guitar next to you. You know, the whole scrumb and

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Speaker 2: you sound we've done at Auburn University. And you get

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Speaker 2: an old GM pickup truck that you paid dead paid

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Speaker 2: three thousand dollars.

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Speaker 4: You could see the road through the floor.

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Speaker 2: GMC Sierra Denali Ultimate ready ninety one dollars.

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Speaker 4: That's my Paul selling today.

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Speaker 1: So Paul, are you tenan us that you're expecting higher

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Speaker 1: average selling prices in a second half?

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Speaker 4: Yeah?

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Speaker 3: So, John, we saw we saw higher ATPs in the

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Speaker 3: second quarter, about sixteen hundred dollars higher than the first

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Speaker 3: quarter sequentially. You know, I think we're going to continue

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Speaker 3: to watch it. We've taken this whole year with a

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Speaker 3: little bit of caution, just understanding the macro that's out there.

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Speaker 3: And what we said at the beginning of the year

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Speaker 3: was if the customer held in and we were able

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Speaker 3: to maintain pricing, we expected to significantly outperform the guidance

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Speaker 3: that we posted. And then after the first quarter, we

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Speaker 3: raised guidance by five hundred million dollars on the EBIT line,

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Speaker 3: and now we're raising it by a billion dollars. So

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Speaker 3: we see a lot of stability in the market. We're

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Speaker 3: just kind of taking it one day, one month at

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Speaker 3: a time and watching the results come in. We've got

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Speaker 3: to be focused on quality, and we've got to be

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Speaker 3: focused on getting production and the vehicles that customers want.

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Speaker 1: Let's just talk about customers a little bit more. We

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Speaker 1: saw some data recently, I think for the Furer Reserve

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Speaker 1: in the last couple of weeks about people being rejected

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Speaker 1: for auto loans. Paul, can you give us an idea

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Speaker 1: of how some of these purchases are being financed and

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Speaker 1: the kind of trends you seeing developed.

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Speaker 3: So, you know, we've got a lot of good insight

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Speaker 3: on that through our GM Financial captive company, and their

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Speaker 3: results are pretty strong. We continue to write new loans.

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Speaker 3: In fact, we've written at a higher share the first half

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Speaker 3: of the year than traditionally, which is not a bad thing.

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Speaker 3: We're there to meet our customers where they need us,

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Speaker 3: and GM Financial has done a great job of that.

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Speaker 3: We watched the credit metrics on a weekly basis across

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Speaker 3: their entire portfolio and we haven't seen anything that gives

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Speaker 3: us a reason for concern. You know, we have really good,

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Speaker 3: high quality borrowers on our new vehicles and credit is

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Speaker 3: performing quite well from that. So we understand obviously in

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Speaker 3: the subprime world in some of the used cars where

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Speaker 3: we've seen banks tightening a little bit. That's not necessarily

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Speaker 3: our Forte, but certainly where we're lending on new vehicles.

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Speaker 3: The results are pretty strong.

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Speaker 2: And Paul, I'm going to pick on Ittey mccaulley. It's

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Speaker 2: City Group and that you know from the pandemic from

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Speaker 2: the end of twenty nineteen, I got a shareholder return

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Speaker 2: of three percent, four percent per year, whatever the number is,

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Speaker 2: it's low single digit. Clearly it's not acceptable. The fact is,

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Speaker 2: somebody is knowledgeable, as Itta mccaullay or the team over

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Speaker 2: at Bloomberg Intelligence, looks for huge share price performance from GM.

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Speaker 2: What is going to be the catalyst for people to

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Speaker 2: realize the new profitability of GM.

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Speaker 4: What's the thing that's going.

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Speaker 2: To get me to it's McCauley's price target, which is

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Speaker 2: a double Yeah.

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Speaker 3: So that's that's the question of the day, Tom, and

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Speaker 3: one that we spend a lot of time thinking about.

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Speaker 3: Obviously for our shareholders, you know, one of the things

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Speaker 3: that we've got to do. We've just got to continue

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Speaker 3: to consistently perform. I'm a big believer that the market

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Speaker 3: can ignore fundamentals too long, and when you look at

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Speaker 3: the type of performance that we've been driving, I think

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Speaker 3: we're establishing a really good track record of credibility. So

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Speaker 3: that's job one number two on the macro side, clearly,

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Speaker 3: it's been a bit of a headwind over the last

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Speaker 3: eighteen months. As you know, expectations are consistently downward from

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Speaker 3: where we are, which is why it's so important now

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Speaker 3: that we've put two quarters out there with a raise

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Speaker 3: on the guidance this year will be really, really strong.

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Speaker 3: We're overcoming pension headwinds, we're overcoming some normalization at GM

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Speaker 3: Financials earnings. But you know, the results are going to

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Speaker 3: be very similar, if not, if not potentially better better

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Speaker 3: than last year. So that's what we're focused on. On

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Speaker 3: the market. I think it'll come around. You know, we've

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Speaker 3: got to make sure that the macro clears up a

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Speaker 3: little bit. I think we've seen that over the last

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Speaker 3: couple of months, and you know, I think we've got

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Speaker 3: to make sure that we reach an agreement with the UAW,

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Speaker 3: not just for us but as an industry, because obviously

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Speaker 3: there's some uncertainty around that in investors' eyes. But we're

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Speaker 3: focused on executing. We're focused on getting a deal that

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Speaker 3: works for our people and rewards them for the tremendous

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Speaker 3: work that they're doing across the board.

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Speaker 1: Paul Ready, I'm fair of us to save this question

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Speaker 1: until them, because we only have a couple of minutes left,

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Speaker 1: but I need to get this in. There is some

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Speaker 1: subtle indicators worldwide the EV demand is tailing. Goff, and

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Speaker 1: I ask this question to you as a CFO, how

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Speaker 1: do you manage the risk of a massive investment cycle

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Speaker 1: and a huge push wholesale just going into EV not

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Speaker 1: working out and in five to ten years consumers don't

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Speaker 1: want this stuff. We see greater efficiency through hybrids, maybe

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Speaker 1: even fantastic sustainable fuels. Paul has a CFO of a

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Speaker 1: car company right now, how do you manage that risk?

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Speaker 3: Well, John, I think it's a great question, but it's

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Speaker 3: one that you know when I look at the portfolio

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Speaker 3: of vehicles that we have really really great internal combustion

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Speaker 3: engine vehicles and a growing EV business off of a

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Speaker 3: platform where we've designed evs from the ground up. A

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Speaker 3: lot of the evs that are on the market are

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Speaker 3: you know, traditional ice vehicles where you know companies have

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Speaker 3: put a battery solution into it and it's not optimized

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Speaker 3: in that standpoint. When you look at the altium platform

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Speaker 3: of vehicles where we're growing production very very rapidly. Now

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Speaker 3: we think we've got vehicles that customers demand, and you

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Speaker 3: certainly see that in our order books across the board.

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Speaker 3: So one of the things that you haven't seen from

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Speaker 3: us is the type of pricing volatility that many of

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Speaker 3: our competitors are experiencing with some of those vehicles that

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Speaker 3: were early to market. We think our vehicles, when you

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Speaker 3: look at the Silverado EV forty percent more range than

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Speaker 3: anything else that's out there across the board. We think

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Speaker 3: we can win customers over over the long term. But

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Speaker 3: we've also got a very good ice portfolio to fall

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Speaker 3: back on and it's driving incredible performance for US.

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Speaker 1: I said it was unfair. It was unfair because we

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Speaker 1: need a much longer conversation about this in the future. Paul,

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Speaker 1: appreciate your time, So the general motors see fo Let's

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Speaker 1: stock this morning doing okay from New York City this morning.

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Speaker 1: Good morning,