General Motors has a plan in place to deal with President Donald Trump’s proposed tariffs. We just don’t get to know what it is.
According to the New York Times, the company has various plans ready to go, but won’t make any changes until if and when the tariffs become reality.
From the Times:
The automaker has pulled together an “extensive playbook” of possible options but won’t put them in place “until the world changes dramatically, and we see a permanent level of tariffs going forward,” the company’s chief financial officer, Paul Jacobson, told reporters in a conference call on Monday evening.
“We’ve been preparing for that and want to make sure that we are prudent and don’t overreact,” he added.
As you probably have seen, Trump has proposed 25 percent tariffs on goods produced in Canada and Mexico, starting Feb. 1. That is checks notes this weekend.
We’ve pointed out that if Trump moves forward, it could increase the price of new cars — at a time when MSRPs are already sky-high. The new-car average transaction price was $49,740 in December, according to Kelley Blue Book.
The NYT points out that GM built 900K cars in Mexico in 2024. That’s more than any other automaker, and the bulk were shipped to the U.S.
The Chevrolet Silverado, GMC Sierra, and Chevy Equinox, money-makers all, are among the list.
More from the Times, concerning GM’s potential plans and the company’s overall financial state:
In a separate conference call on Tuesday, G.M.’s chief executive, Mary T. Barra, said the company could increase production at U.S. pickup truck plants and send more of the trucks that it produces in Canada and Mexico to other countries, instead of exporting them to the United States.
“We have capacity in the United States to shift some of that,” she said. “We are working across our supply chain, logistics network and assembly plants so that we are prepared to mitigate near-term impacts” of tariffs.
G.M. said on Tuesday that it lost $3 billion in the final three months of 2024, stemming from a $4 billion noncash expense related to a restructuring of its joint venture operations in China. The company’s revenue in the quarter rose 11 percent.
For all of 2024, G.M. reported a $6 billion profit, down from $10.1 billion in 2023. Almost all profit came from North America.
It makes sense that GM would have multiple plans ready to go. Trump has shown over time that he sometimes doesn’t follow through on plans, or he does with last-minute changes. The company would also have to figure out how much the tariffs are actually costing and how much can reasonably be passed on to consumers or absorbed by the company. And, of course, GM doesn’t want to tip its hand for competitors to see.
We’ll see what the General does once Trump makes a move. Keep an eye on this spot for more.
[Images: GM/Chevrolet/GMC]
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