General Motors Stock Jumps As CFO Sees Battery Recall Cost Recovery, Stable Chip Supplies
General Motors (GM Get General Motors Company (GM) Report shares moved higher Friday after the carmaker said it expected to be reimbursed for its billion-dollar battery recall and forecast an easing of the bottleneck in global semiconductor supplies.
Speaking at RBC’s Global Industrials Conference Friday, chief financial officer Paul Jacobson said General Motors sees a "more stable year" for semiconductor supplies in 2022, just days after extending shutdowns in assembly plants in Ohio and Missouri.
Jacobson also said he expects the carmaker to recover the estimated $1 billion cost linked to the recall of Chevy Bolt batteries from Korea-based manufacturer LG Chem Ltd. The recall was expanded last month to include all worldwide sales of the electrified sedan since 2019 in order to address two manufacturing defects -- a torn anode tab and folded separator -- in the car's battery cell that could increase the risk of fire.
General Motors shares were marked 3% higher in early trading Friday to change hands at $49.88 each.
Earlier Friday, Toyota Motor Co. (TM Get Toyota Motor Corp. Sponsored ADR Report, the world's biggest carmaker, cut its 2022 production forecasts amid what it called the twin headwinds of rising coronavirus infections in Asia and the ongoing shortage in global semiconductors.
Toyota said it would produce around 9 million cars this year, down from its prior forecast of 9.3 million, as COVID-related shutdowns in assembly hubs based in Vietnam and Malaysia added to prior concerns linked to a lack of car-specific chips.
The decision follows a series of shutdowns and supply-chain warnings from automakers in the U.S. and Europe, while data from China -- the world's biggest car market -- showed that August sales slumped 17.8% from last year as the chip shortage left fewer vehicles available for delivery.