General Motors Co. relied on its profit-rich pickups to drive $2.8 billion in pre-tax earnings in the fourth quarter of 2018 as it spent about $1.3 billion on restructuring moves that are expected to ramp up this year.

The automaker reported a pre-tax profit margin of 8 percent on $11.8 billion in earnings for the full year, which was off about 8.3 percent from 2017. After taxes, the automaker made $8.1 billion on $147 billion in revenue.

GM's financial performance in 2018 was considered strong despite falling off record-setting paces in 2017 and 2016 and came as the automaker took a $1 billion hit from costs related to trade and rising commodity costs due to tariffs. Robust sales and strong pricing on trucks and utilities helped GM achieve a strong finish in the fourth quarter.

"What drove these results was a flawless truck launch, and Q4 results were helped quite a bit by the fact that from a price-volume perspective our trucks did exceptionally well," CFO Dhivya Suryadevara said. "We’re still seeing strength in recently launched crossovers."

GM's average transaction price in 2018 reached a record of $36,000 as incentives as a percent of average prices fell 0.3 percent from 2017.

Looking forward, Suryadevara said the first quarter of 2019 is expected to be GM's weakest. Partially driving that, she said, is that a majority of the automaker's planned downtime at Arlington Assembly Plant in Texas is happening in the first quarter. That downtime is expected to cost GM about 25,000 full-size SUVs as the automaker prepares to build all-new versions of its full-size SUVs.

GM said last month it expects a slight increase in profits in 2019, forecasting earnings-per-share between $6.50 and $7 and free cash-flow of up to $6 billion this year. 

The Detroit automaker reported pre-tax earnings per share of $6.54 in 2018, down 1.2 percent from 2017. GM's automotive free cash-flow totaled $3.8 billion, off $1.8 billion from 2017 and falling short of a $4 billion forecast for last year as the company spent $600 million in pre-funding for non-U.S. pensions. 

GM's $10.8 billion in North American earnings last year will result in profit-sharing checks of up to $10,750. That's down $1,000 from profit-sharing checks distributed last year as North American profits dipped about $1.1 billion.

For the fourth quarter, GM reported a pre-tax profit margin of 7.4 percent and earnings-per-share of $1.43, off 13.3 percent from the same quarter in 2017. After taxes, GM made $2.1 billion on $38.4 billion in revenue.

The automaker's report of hefty profits in 2018 comes as GM executes a sweeping restructuring plan that includes a weeks-long process of cutting more than 4,000 salaried workers and later this year indefinitely idling five plants in North America. 

GM expects to spend about $2 billion on restructuring activity in the first quarter of 2019, while the moves are expected to save some $2.5 billion this year and up to $6 billion by 2020.

Lordstown Assembly in northeast Ohio will be the first to go dark next month at the same time two of Detroit-Hamtramck Assembly's four cars stop production. Baltimore Operations will idle starting on April 1, Detroit-Hamtramck will fully idle on June 1 and Warren Transmission will idle on Aug. 1. Oshawa Assembly in Ontario is facing closure in the fourth quarter of 2019.

"We can't run at 75 percent (plant) capacity," CEO Mary Barra told investors on a Wednesday conference call. "We had to improve that."

GM has said it has 2,700 job transfer opportunities, outlined in the automaker's contract with the United Auto Workers, for the 2,800 hourly employees impacted in the U.S. As of Feb. 1, 943 workers from Detroit-Hamtramck and Lordstown have accepted transfers to other GM facilities.

The Detroit automaker's earnings from its international business, which includes China, made $400 million last year. That's down from a profit of $1.3 billion in 2017.

GM Cruise lost $200 million in the fourth quarter to total the Detroit automaker's investment in the autonomous vehicle arm at $700 million for the year.

The previous guidance for spending on autonomous vehicle development was $1 billion for 2018. Falling short of that, Barra said, was a sign of "good cost discipline." GM is again predicting about $1 billion in autonomous vehicle spending in 2019.

GM Cruise also attracted billions of dollars in investments in 2018, including $2.25 billion from Japanese investment firm SoftBank Investment Advisers and $2.75 billion from Honda Motor Co. as part of an alliance on future autonomous vehicle development.

GM Financial made $1.9 billion in 2018, up from $1.2 billion in 2017.

Twitter: @NoraNaughton

Read or Share this story: