GM
#Thanks, <UNK>, and good morning, everybody
Thanks for joining
The results we are reporting today on a continuing operations basis demonstrate our commitment to extending our strong core business performance while redefining the future of personal mobility
Taking a look at the numbers we posted, EBIT adjusted is $2.5 billion
Year-to-date, EBIT adjusted is $9.8 billion with a margin of 9%
And our EPS diluted adjusted is $1.32. We returned $2 billion in cash to shareholders through share repurchases and dividends and our return on invested capital adjusted is 27.6% on a trailing four quarter basis
We delivered solid results even with planned lower third quarter production in North America
Although market is more challenging than expected, we will deliver another strong year
Chuck will share additional details in regional numbers in a few minutes
Our work to strengthen the business and focus on areas with higher shareholder return continued with the closing of the sale of our Opel-Vauxhall business
We expect to close the sale of GM Financial's European operations by the end of the year
In addition to the international operations restructuring we previously announced, earlier this month we shared that we will combine all GM operations outside of China and North America under Barry Engle, effective 01/01/2018. This allows us to realize greater efficiencies and supports our disciplined plan to operate in the right markets to strengthen our performance and to focus on long-term growth opportunities
From a product and brand standpoint, customers are responding favorably to our new vehicle launches
In the United States, retail sales of crossovers from our Chevrolet, GMC, Buick and Cadillac brands were up 25% year-over-year for our best crossover sales quarter in history
The second generation of the 2018 Buick Enclave is arriving at dealership
It builds on the success of its predecessor and ushers in Avenir, Buick's new upscale sub brand
We have high expectations for Avenir as it joins Denali GMC's premium sub-brand in our Buick GMC retail channel
Denali makes up more than a quarter of GMC's overall sales and generates higher margins and average transaction prices
Avenir and Denali will offer our customers attainable luxury from our premium brands
Also arriving at U.S
dealerships is the 2018 Cadillac CT6 with Super Cruise, hands-free highway driving technology
Journalists and influencers recently traveled coast-to-coast to demonstrate its capability with overwhelmingly positive reviews
Super Cruise will also launch in China next year on the CT6. Sales in China are tracking at a record pace, led by the growth at China – or excuse me at Cadillac and Baojun
To continue this momentum, we launched five new models in the quarter, including the Baojun E100 EV
This is a niche build-to-order electric vehicle from our JV partner SGMW
We plan to launch six additional models in Q4. Last month in Shanghai, I helped celebrate our 20-year joint venture with SAIC GM and the production of our 15 millionth vehicle
It was an important milestones representing a productive partnership in our largest market
And in South America, we are now gaining market share and making money in an industry still significantly depressed from prior high levels
Now, I'd like to talk about the future of personal mobility
We all know the industry is changing very quickly
By staying focused and disciplined, we have repositioned our core business to be more resilient through the cycle and we have made key investments that will help us create a safer, better and more sustainable world and a healthy business model well into the future
We believe our future mobility initiatives will be accretive to our core business because they give us an opportunity to increase our exposure to new customers in urban centers and coastal markets
At the same time, our core operations will continue to generate strong profits in the markets that will be the last impacted by these new mobility trends
Regardless of where we do business, we are committed to an all-electric future, and we have announced plans for at least 20 new all-electric vehicles by 2023, including two in the next 18 months
We've already done a lot of the hard work, investment and innovation necessary to meet this commitment
Our extensive track record with electrification, including what we have learned from the Chevrolet Volt and the Chevrolet Volt EV along with strong supplier partnerships and mass market EV manufacturing experience give us confidence that this portfolio puts us on a path to a new profitable generation of electric vehicles
We will pursue both battery electric and hydrogen fuel cell technology because we will need both for solutions to meet all of our customers' transportation needs
For example, we revealed a new autonomous capable hydrogen fuel cell platform called the Silent Utility Rover Universal Superstructure or as we refer to here SURUS
It was designed to provide commercial vehicle solutions including flexible cargo delivery and utility services
But its ability to solve tough transportation challenges created by natural disasters, complex logistic environments and global conflict also make it adaptable for military use
I'm also pleased with the progress our team is making on self-driving vehicle technology
GM and Cruise Automation recently deployed our latest generation self-driving electric test vehicle
We believe it will meet the redundancy and safety requirements necessary to operate without a driver
It is our third generation of AD technology in just 14 months
The GM and Cruise teams have worked together to integrate the best hardware and software with an almost completely new and fault-tolerant systems that are unique to a driverless vehicle
In fact, the latest generation of self-driving electric test vehicle has about 40% unique content compared to previous generations
Another reason we are moving so fast is because we are testing in one of the most challenging urban environments anywhere, San Francisco
In this environment, we encounter almost 50 times more interactions with pedestrians and other vehicles and complex road intersections compared to driving in a suburban environment
This testing is accelerating our deployment of self-driving technology, and we believe it will put us on the path to the fastest path toward deploying self-driving cars safely and at scale
To move with even more speed, we also recently announced we will be opening a Cruise office in New York City to begin testing our self-driving cars there as well
And just two weeks ago, we acquired Strobe, gaining access to new LIDAR technology that will significantly improve the capability of self-driving cars and reduce the cost of each LIDAR on our self-driving cars by 99%
Finally, in August, we launched Cruise Anywhere, a ride-sharing beta test platform for select Cruise Automation employees in San Francisco
Employees use a GM smartphone app to hail a ride in a self-driving electric test vehicle
Focusing on all aspects of the self-driving experience gives us more flexibility to develop the appropriate go-to market strategy
Our vision is ambitious, and I believe GM is uniquely positioned to transform how we provide personal mobility for our customers
We have the right team with the right technical and business expertise to solve problems along with the passion to change the world
We will host an investor event later this year to share more details, so stay tuned
And now I'd like to turn it over to Chuck
Good morning
I think when you see the new truck platform come out both full-size truck and SUVs, you're going to see us having a broader portfolio that really addresses specific customer needs including from an off-road capability
Oh, absolutely
We are going to be looking globally
We're working extremely hard on the technology to have self-driving vehicles and looking at it from a safety perspective, a performance perspective, but we're working hard to lead in that area, and then we're already evaluating what markets make the most sense to generate the most shareholder value
Generally, when we look at the capital spend that we'd had in the engineering spend, we are able to do the work that we want to do from AD perspective, and by the way an EV perspective and a connectivity perspective
We're going to continue to evaluate that, but our current view is that that largely is all included, because we've been driving a lot of efficiencies, especially in the capital budget
When we look at being able to reuse architectures, reuse equipment, and then also the synergies and the work that's going on in product development
So, we will evaluate because we don't want to be constrained by being able to fund
We know speed is important to get the first mover advantage
But right now, I'd say generally it's within those bounds
Yeah, I feel that we do have a lot of the puzzle pieces
We continue to look at it
This is a very dynamic and evolving marketplace
I think the real opportunity with Strobe is we saw an opportunity, also partnering with the work that we do at the Hughes Research Labs to look at that technology, how to really improve the capability of the technology which gives you the ability to open up the areas where you can do autonomous vehicle while taking the cost significantly out and really getting to an automotive-grade LIDAR capability
So we'll continue to evaluate
I don't have anything to share right now
But again, this is fast moving and we're going to look at what makes the most sense to allow us to go with speed, with safety, and to deliver value
We are too
So, I don't have anything new to say
What we've talked about is it will be, first of all, will be gated by safety, so being able to take the driver out will – we have our metrics we defined to look at that and when we'll be ready to do that, but we think that's in quarters, not years
And as it relates to how we deploy, we very much believe we want to maintain the relationship with the customer
And so, we're exploring many options and we could partner with someone, partner with many or work on our own the Cruise application that is being used with our employees at Cruise is going quite well, in fact we have some of those people participating in their pilot that are using it for all of their transportation needs
So, it continues to – we continue to develop that, and we're keeping our options open
Certainly, that could be possible
We're keeping all options open
It's kind of in this point where the technology is evolving and the opportunity is evolving
We're having a lot of conversations, kind of everyone is talking to everyone
And we're going to continue to look at what provides us the greatest value for our shareholders over the long term because we think this is a very significant business that is accretive
And we're going to look to get – it gets gated by the technology and that's why our focus is on technology
The fact that we have everything under one roof and we can move so quickly
I mentioned that we have our third generation of vehicle – AD vehicle, test vehicle on the round, we're in parallel already working on our fourth
So, that speed with technology that is evolving so quickly, both from a hardware and a software perspective, is our primary focus
But then we're going to look to how do we launch and put a business model together that's most advantageous for our shareholders
Thanks, <UNK>
I was just going to add that when you look at going back to what Chuck said about South America, Barry Engle and his team have done a great job of setting that business up in a even more cyclical business
And so, looking at that and taking that leadership team and looking at all of those business together is definitely going to be a benefit, and Barry is the right guy to do it
I think we've already been transparent in what we're reporting from in the Corp segment and been clear about the amount of money that we're spending on autonomous
But I think when we look it, our focus, <UNK>, right now is to move as quick as possible to develop the technology, have a first mover advantage and be able to not only have the safest technology, but be able to deploy it at scale
That's where our focus is right now
And there's the integration and not when you – depending on how you would separate it of where is IP, where is IP formed, right now, that's why our focus is keeping it all together
And I really do think it's enabling us to move quickly
The amount of work that goes on between Warren, Israel, Canada and San Francisco on a daily basis is stunning
And the fact that we're working on our fourth generation, that's where our focus is right now
And I think we'll have time to look at it as that develops and as the business model develops, what is the best reporting and structure from a company perspective to drive the best shareholder value
So, Super Cruise, which you're correct that we did delay because we were gated by safety
There's a lot of learning that went into that system
And it's the base that the core organization has that is now the Cruise Automation team is benefiting from of safety, of redundancy, of looking at the – one of the technologies was critically important
Super Cruise is the way we monitor the driver to make sure that they're paying attention
And so, all those learnings go into Cruise
And then – but as I look at that and I look at where the schedule we put ourselves on Cruise and how the technology is developing, I continue to be very forward-leaning on that with the work that I see happening there, and all the learnings we had from Super Cruise are transferring into Cruise Automation
Well, thanks, everybody
I appreciate you participating today
I hope that you see we're demonstrating that we are a very disciplined organization, that we're going to take the bold actions and make the tough decisions to drive a profitable business and a very resilient core business
Also, we are committed moving with speed and we're going to continue to invest in EV, AD because we see huge opportunity in the future of personal mobility
We are intent on leading the transformation of this industry, and we have created a vision of zero crashes, zero emissions and zero congestion that we believe is the future for this industry
We are in a leadership position and we think it is the best way to generate long-term shareholder value and you will hear more as we move forward
So, thank you very much
