GM Expects 2015 Operating Profit Will Increase From Last Year

Jan 14, 2015 09:45 AM EST | Matt Mercuro

General Motors expects its total earnings before interest and tax adjusted and EBIT-adjusted margin to increase in 2015, compared to last year, after adjusting 2014 for the impact of recall costs.

The automaker also expects improved automotive results in all regions. This is a modest global industry growth expected in 2015, which will take place because of continued growth in Europe, China and the U.S. and launches of important vehicles.

During the 2014 Detroit Auto Show, CEO Mary Barra, President Dan Ammann and Executive Vice President and Chief Financial Officer Chuck Stevens announced this outlook with investor analysts.

"We had a pivotal year in 2014, outlining a customer-focused strategic plan for the company and delivering on our commitments by achieving strong core operating performance," Barra said. "We'll build on this momentum in 2015 and continue executing our plan to become the most-valued automotive company."

GM also affirmed its plan to meet its 2016 financial targets in order to achieve EBIT-adjusted margins in North America of 10 percent and to return to profitability in Europe, according to a company release.

GM predicts that global industry sales will rise to about 3 percent to 89 million vehicles this year, though heightened competition will only allow for moderate increases in GM vehicle pricing.

A return to profitability for GM's European operation would be huge, considering it hasn't been profitable since 1999.

"Overall, 2014 was a very solid year in which we met expectations on core operating performance, despite a number of significant headwinds," Stevens said, according to the GM release.

GM wants to increase capital expenditures to around $9 billion in 2015, based on increased investments in products and technologies, in order to support future growth.

GM is also trying to move past a year of massive recalls from a defective ignition switch linked to 45 deaths so far. 

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