DETROIT — General Motors' net income and operating profit sank in the first quarter because of reduced full-size pickup production, a restructuring in Korea and other costs.
Earnings before interest and taxes declined 27 percent to $2.6 billion. Net income dropped 59 percent to $1.1 billion on a 3.1 percent drop in revenue to $36.1 billion.
GM's wholesale volume — sales invoiced and shipped to dealers — in North America declined 47,000 in the first quarter, including 31,000 fewer full-size pickups. Because of the planned downtime, GM said, the first quarter and fourth quarter (for heavy-duty pickups) would mark its weakest results for the year.
GM CFO Chuck Stevens said the pickup downtime cost the company $700 million to $800 million in the quarter. For the year, GM expects to lose volume of about 60,000 to 70,000 pickups.
The restructuring of its Korean operations, including the closure of its Gunsan plant, cost the company $900 million, including $400 million in termination benefits. GM expects to incur another $100 million in charges in the second quarter.
Stevens said GM expects Korean operations to be profitable in 2019, thanks to a restructuring that's expected to result in $400 million to $500 million in annual cost savings.
Korean workers, Stevens said, ratified a new labor agreement and the company has a preliminary agreement with the Korean Development Bank to provide $750 million for future investments. It also reduced its work force by 4,000 to 13,000.
"All of these will support a viable, sustainable business in Korea," Stevens said.
Stevens declined to comment on reports suggesting that GM is ending production of the Chevrolet Sonic and Impala. "We've already signaled that there's going to be significantly lower investment in passenger cars on a go-forward basis," he said.
Stevens said GM is getting ready to launch its Global Emerging Markets product program, which will profitably replace legacy passenger car platforms around the world. The GEM platform was among the additional costs that contributed to GM's $3.5 billion decline in adjusted automotive free cash flow for the quarter.
GM Financial earnings nearly doubled to $443 million; 41 percent of GM's U.S. sales in the quarter were financed through GM Financial.