Profit falls for GM

General Motors Co announced that net income dropped in the fourth quarter, and the company is forecasting a flat 2017 profit per share after two years of record profits. GM lost $683 million to foreign currency exchange rates in the fourth quarter. $410 million stemmed from the declining value of the British pound following the vote to leave the EU. Net income fell to $2.4 billion, down from $8.6 billion a year earlier. Stocks fell five per cent at the news to $(US)35.07. As well as the strength of the US dollar against the British pound, the rising inventories of unsold vehicles in the US is also causing concern; in North America, GM’s largest market, inventories of unsold vehicles rose a third to 845,000 vehicles at the end of 2016. Its North American adjusted profit margins declined to 8.4 percent in the fourth quarter, down from 10 per cent a year earlier. Adjusted US profit margins for full-year 2016 were 10.1 per cent, down from 10.3 per cent in 2015. CFO Chuck Stevens told Reuters the company does not expect to break even in Europe this year, but will push to reach that goal in 2018. "We need to take renewed actions to get back on the path to a sustainable business," he said. "And we will."