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The
two Detroit automakers are in mid-leap between a
combustion-powered present, and a future they have promised will
be defined by electric vehicles and software-powered services.
Both companies have mapped out multibillion-dollar investments
in new North American electric vehicle and battery factories,
aimed at challenging Tesla Inc and a flock of smaller EV
startups in the still-tiny market. But those new factories will
not be at full speed until the middle of this decade.
Though GM and Ford were once giants of the global auto sector,
their market capitalizations have been dwarfed by EV maker
Tesla. Tesla on Wednesday reported stronger than expected
revenue and profit for the fourth quarter of 2021, but warned
that supply-chain bottlenecks would continue through 2022 and
likely prevent its factories from running at full capacity.
GM last year sold fewer vehicles in the United States than
Toyota Motor Corp, the first time in 91 years that GM was not
the No. 1-selling automaker in its home market.
GM and Ford's profits in 2021 were lifted by consumers willing
to pay record-high prices for petroleum-powered pickup trucks
and SUVs. In 2022, analysts are concerned the Detroit
manufacturers will face a more uncertain economic environment,
including rising interest rates, high oil prices and continuing
supply-chain bottlenecks that could curtail production.
Analysts expect both companies to be cautious in their outlooks
for 2022. Shortages of semiconductors are expected to weigh on
production into the second half of the year, Bank of America
wrote in a note.
"While automakers will enjoy production recovery and inventory
restocking, (those) could be coupled with price declines, mix
deterioration, rising input costs," Morgan Stanley said.
Ford told investors in its third-quarter report that it expected
$1.5 billion in higher commodity costs, and saw inflationary
pressures across a broad range of expenses.
Wall Street has shown more confidence over the last several
months in efforts by Ford's CEO, Jim Farley, to accelerate the
company's electric pickup truck and van programs. Ford's market
value hit $100 billion in mid-January, exceeding GM's value for
the first time in more than five years. But the market value of
Ford, whose quarterly results are expected on Thursday
afternoon, has since dropped by 20% after the company issued a
complicated reworking of its 2021 profit guidance.
GM Chief Executive Mary Barra is expected to have a more
straightforward story to tell on Tuesday about fourth-quarter
and full-year results. GM Chief Financial Officer Paul Jacobson
told investors in December the company expected adjusted pretax
profit for 2021 to reach $14 billion, higher than previous
forecasts.
(Reporting by Paul Lienert and Joseph White in Detroit; Editing
by Matthew Lewis)
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