DETROIT — The Detroit 3 emerged from the worst of the COVID-19 pandemic with better-than-expected financial results. Now the companies must navigate an uncertain recovery amid the worst economic outlook since the Great Depression.
Ford Motor Co. posted a surprise $1.1 billion second-quarter profit — thanks to fortuitous timing on an investment by Volkswagen Group into the Ford-owned self-driving startup Argo AI — and its operating loss of $1.9 billion was much better than a projected $5 billion loss. General Motors reported a better-than-expected $758 million second-quarter loss and nearly broke even in North America. Fiat Chrysler Automobiles lost $1.24 billion in the quarter, but its North American operations eked out a small profit despite lengthy plant closures.
All three companies credited strong operational execution and cost-saving measures taken in the spring.
After collectively restarting vehicle production in May, Ford, GM and FCA experienced few hiccups thanks to stringent return-to-work safety protocols.
Now, executives hope to continue the recovery.
Ford, the only company to provide full-year guidance, said it expects to make money in the third quarter but post a loss for the year because of the rollout of new vehicles such as the redesigned F-150, Bronco Sport and Mustang Mach-E in the year's final months.
GM believes it can recover from the financial hit of the pandemic by the end of year, after the automaker was already on track with its 2018 restructuring plan and began slashing more costs when the coronavirus took hold in the U.S. But that hope could evaporate if the virus continues to spread, shutting plants again and stifling demand.
"GM deserves credit for pivoting quickly and rolling out blockbuster incentive programs that arguably kept the industry afloat through its most challenging period in more than a decade," Jessica Caldwell, Edmunds' executive director of insights, said in a statement.