GM posts better than expected truck sales in Q3
Shares of the automaker increased over 7% during premarket trading before leveling off at around 3%.
GM didn’t provide new earnings guidance for the year but cited several “moving pieces” such as potential stimulus and the COVID-19 pandemic. GM CEO, Mary Barra, commented that the fourth quarter isn’t thought to be as strong as the third quarter. She added that the possibility of an uncertain outcome of the presidential election could damage sales for the rest of the year.
“When we look at the election, we think the extended length of time to finalize the vote count was anticipated given the unique circumstances coming into this election,” Barra commented during a media call Thursday morning. “There are a lot of moving pieces right but we’re hopeful that we’ll continue to have a strong recovery that we’ve seen in the United States and in China.”
GM’s North American operations earned around US$4.3bn during the third quarter, which is up from 44% on the previous year despite US sales declining 9.9% during the period. The organisation reported a 15% pretax profit margin for the quarter. Earnings for its international operations were in the black with pretax earnings of US$10mn.
John Stapleton, GM interim CFO, commented that the automaker’s “sales in the US and China are recovering quicker than many people anticipated and GM is benefiting from robust customer demand for our new vehicles and services, especially its full-size pickups and SUVs.”
Barra added that GM is working to scale production of its trucks, and added that an announcement is expected “very shortly. “We are always working to eek out every single truck we can possibly produce,” she said. “I’d just ask you to stay tuned. You will hear more about that very shortly.”
Net income increased 74% to US$4bn from US$2.3bn during the third quarter of 2019.
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.