As a result, about 44,000 U.S. hourly workers at General Motors will receive a profit-sharing check of $9,000, said GM spokesman Jim Cain. The before-taxes payout for its UAW-represented workforce is an increase from $8,000 in 2019, but down from the $10,750 paid to workers in 2018.

For the full year, GM's pretax profits were $9.7 billion, up from $8.4 billion a year earlier driven in part by the fact that GM's third- and fourth-quarter earnings in 2019 were hit hard by a 40-day strike by the UAW.

Additionally, GM gained traction last year with its redesigned full-size SUVs and big demand for pickups, both of which deliver fat profits.

In a letter to shareholders Wednesday, GM CEO Mary Barra said GM's brands were well prepared when plant production restarted and consumer demand recovered faster than expected — "Chevrolet and GMC with their outstanding full-size and midsize pickups; and all four brands with a mix of new small- and full-size SUVs, which we launched on time despite the pandemic."

"These products helped drive our largest year-over-year gain in total U.S. market share since 1990. Just as important, their profits are helping us create a new chapter for GM that is electric, connected, sustainable, inclusive and growth-oriented."

In the fourth quarter, GM's pretax profits surged to $3.72 billion from $105 million in the year-ago period.

The UAW issued a statement commending GM on the results.

"Despite a year of a pandemic and loss of production in 2020, General Motors reported a solid profit for North America," said Terry Dittes, UAW vice president of the General Motors Department. "This is a testament to our UAW-GM Membership, who produce some of the finest and most sought-after vehicles in the world, right here in the U.S.A.”

GM's results beat Wall Street’s expectations in the fourth quarter, said Michelle Krebs, executive analyst for Cox Automotive.

"It should not have been a surprise. GM outperformed the overall market in the fourth quarter, with sales up 5% to the industry’s 2% rise," Krebs said. "Further, GM sold more of the right products in the quarter — pickup trucks and SUVs, especially its new large ones, that generate the biggest profits for the automaker. GM’s biggest challenge is inventory. Its supply of those profitable models is tight."

Looking ahead, GM said it's well-positioned in 2021. The industrywide semiconductor chip shortage will not affect electric vehicle development.

To mitigate the chip shortage impact, GM said it will prioritize production of full-size trucks, SUVs and EVs. For 2021, GM expects to report $10 billion to $11 billion in pretax profits, which includes a hit of $1.5 billion to $2 billion due to the chip shortage.

GM is continuing to hire some 3,000 new employees to help it accelerate its development of EVs and self-driving cars. GM has hired half of the 3,000 new employees, Barra said. GM expects to hire the other half over the next quarter. The majority of those hired will work remotely, a GM spokesman said.

Profit sharing

GM's North American pretax profit for 2020 was $9.1 billion, up from $8.2 billion in 2019, it said in its earnings release.

The GM-negotiated formula with the UAW for profit-sharing checks is $1,000 per every $1 billion in annual earnings before interest and taxes.

Ford's 56,000 union represented factory workers in the U.S. will receive $3,625 profit-sharing checks, down from $6,600 paid a year ago as reflected by Ford's profits in 2019. Ford reported its 2020 earnings last Thursday. Its earnings before interest or taxes — EBIT — of $2.8 billion, down from $6.4 billion in 2019. Ford's North America's pretax profit was $3.6 billion — down from $6.6 billion in 2019, $7.6 billion in 2018 and $8.1 billion in 2017.

Last year, about 44,000 Fiat Chrysler workers averaged $7,280, up from $6,000 for 2018. Fiat Chrysler, now called Stellantis, will release 2020 earnings later this month.

GM gained market share

For the year, GM's annual global revenue was $122.5 billion compared with $137.2 billion for 2019. GM's annual net income was $6.4 billion compared to $6.7 billion in the year-ago period.

For the quarter, GM's reported a net gain of $2.9 billion compared to a net loss of $194 million a year ago. Quarterly, global revenue was $37.5 billion, up from $31 billion in the year-ago period.

GM reported full-year earnings per share of $4.33. But despite the gains, GM reported it spent $900 million on Cruise, its self-driving subsidiary. GM CFO Paul Jacobson told reporters that the Cruise "run rate has been pretty consistent for us and that’s what we expect in 2021. They are making tremendous process, but we expect the costs to remain consistent."

For the quarter, GM sold 2.1 million total vehicles globally, up from 2 million in 2019. For the year, GM sold 6.8 million vehicles, down from 7.7 million a year ago.

Buick, which is in the midst of transforming itself to an all-SUV brand, was the only GM brand that reported lower sales in the quarter, selling 44,188 vehicles, down 10% Cox Automotive reported.

GM cut incentives overall by 5% in the quarter to an average of $5,115 per vehicle, but that was still the second-highest incentive spend for any fourth quarter over the past five years, Cox Automotive said.

GM’s average transaction price rose 5% to $44,690, its highest level, according to Kelley Blue Book calculations.

GM ended the year with an auto cash balance of $22.3 billion and total auto liquidity of more than $40 billion.

600 Cadillac stores left

Meanwhile, Cadillac has finished its dealer buyouts, costing GM about $99 million last year.

Late last year, Cadillac offered its 870 dealers nationally the chance to give up their franchise for $300,000 to $700,000 rather than make the investment for tools, training, equipment and charging stations to sell and service EVs. About 270 of them took the buyout, leaving the network at about 600 dealerships nationwide, a source familiar with the matter said.

Cadillac reported record global sales for six straight months including January. In January, Cadillac captured 7.6% of the market share in the U.S. luxury segment, a 1.9% increase over the year-ago period. It was the brand's best January since 2015.

For the year, GM's luxury brand finished down 17.1%, selling 129,495 vehicles in the United States. Globally, the brand sold 380,000 vehicles, down from 390,458 units in 2019.

But Cadillac struggled with inventory in 2020 due to the eight-week plant shutdown amid the pandemic. Inventory levels are still lean, said Mahmoud Samara, Cadillac North America’s vice president of sales, service and marketing. He declined to provide a day-supply figure.

Samara told the Free Press this week that the global shortage of semiconductor chips has not affected impacted Cadillac vehicle production yet but, "is it a concern? Yes. It’s something we have our eye on and we have a world-class supply chain teams working to mitigate that risk."

But for the quarter, Samara said Cadillac's average transaction price is over $56,000, the second highest in the segment after Mercedes Benz, up $2,300 from the year-ago period. In January the number is inching closer to $60,000, he said, lifted by strong sales of the full-size Escalade SUV that often goes for $100,000.

GM plans for Cadillac to lead its all-electric future. Cadillac will launch the all-electric Lyriq early next year, followed by the hand-built Celestiq next year.

Cadillac will build the Lyriq in Spring Hill Assembly in Tennessee, but Samara declined to say where GM will hand-make the Celestiq or how much it will cost. But Car and Driver reported last month that the car should arrive by 2025 with a starting price in the $100,000 range.

Cadillac will have internal combustion vehicles for sale as it transitions to be all electric by 2030, there will be overlap, Samara said. And there will still be super high-performance EVs. Cadillac offers V-series Blackwing high-performance sedans now.

"It’s a strong part of our heritage so just because we go EV, we don’t have to leave that behind," Samara said.

China

GM China weathered a softening market and the residual impact of the pandemic. It reported equity income of $500 million for 2020 compared with to $1.1 billion for 2019.

GM and its joint ventures delivered 2.9 million vehicles in China in 2020. Sales were impacted by the pandemic in the first quarter, but began to recover in the second quarter. Fourth quarter sales increased by 14.1% from a year earlier.

Cadillac posted record sales of over 230,000 cars for the year, up 7.9% from 2019. The surge led by sales of the XT4, XT5 and XT6 SUVs and the introduction of the CT4 luxury sedan. GM said Cadillac now has its strongest portfolio ever in China to compete in the steadily growing luxury vehicle segment.

GM Financial reported full-year revenue of $13.8 billion, down from its record revenue last year of $14.6 billion.

GM's EV initiatives

So far the first quarter has been filled with EV news.

GM looked back 50 years to recall putting one of its first electric cars on the moon, noting if it can do that, it can deliver 30 new EVs to the market by 2025.

GM's biggest news came on Jan. 28 when it said that it "aspires" to offer all light-duty vehicles as zero emissions by 2035 and be carbon neutral by 2040.

As part of the 2021 virtual Consumer Electronics Show, GM showed renderings and animation of its Cadillac Halo concepts: the Cadillac Personal Autonomous Vehicle, which is a fancy self-driving taxi, and Cadillac Vertical Take-off and Landing (VTOL) vehicle, a sleek and futuristic drone-like flying car .

GM announced on Jan. 12 that it is launching a new business, BrightDrop, that will make electric-delivery vehicles and offer other technology and services to companies such as FedEx and UPS.

BrightDrop's first customer is is FedEx, which will buy 500 of the EV600 trucks later this year. Merchants Fleet, a fleet management company, will be the second customer. It plans to buy 12,600 of the EV600 trucks, GM said on Feb. 2.

Merchants Fleet, headquartered in Hooksett, New Hampshire, said it expects BrightDrop EV600s to enter its clients’ fleets starting in early 2023.

Late last month, GM also announced it was partnering with Navistar Inc. and hydrogen provider OneH2 to develop a complete zero-emissions long-haul truck system across the United States. Also, last month, GM and its self-driving car subsidiary Cruise said they will partner with Microsoft to bring self-driving cars to market faster.