General Motors is one of the first car manufacturers to announce its first-quarter results, to the great interest of investors who want to know more about the impact of the enduring supply chain problems on the automobile industry.
Supply chain problems continue to disrupt car manufacturing
General Motors has reasserted its pretax adjusted earnings forecast of between US$13bn - US$15bn for 2022, while raising its net income conjecture from between US$9.4bn and US$10.8bn to US$9.6bn and US$11.2bn. Its first quarter profit margin was 8.2%, down from 9.3% last year.
The car manufacturing industry has been dealing with supply chain problems, primarily caused by the impact of COVID-19 lockdowns, for years. These have just peaked again for GM, as the company has a manufacturing plant in Shanghai, China, which is suffering from severe restrictions. This has naturally been a great source of stress across the manufacturing industry - if not all sectors - and GM has tried to encourage a more helpful direction of thought with regards to stress management - especially when driving.
Creating a more sustainable world at GM motors and through its supply chain
This week, General Motors also announced a new pledge which invites global suppliers to join GM in a commitment to carbon neutrality, the development of ESG initiatives and sustainable procurement across the supply chain.
EcoVadis, a third-party assessor which measures sustainability in businesses, will observe the impact suppliers make.
In what GM has titled ‘The Environmental, Social and Governance Partnership Pledge’, targets for suppliers include:
- Achieving carbon neutrality for their Scope 1 and Scope 2 emissions
- Reaching a minimum score of 50 in the EcoVadis Labour & Human Rights and Ethics pillars, by 2025. This covers employee health and safety, social dialogue, diversity/nondiscrimination, child and forced labour, and seeks to eliminate corruption
- By the same year, suppliers should have hit a minimum score of 50 in the EcoVadis Sustainable Procurement pillar
"There are economic and social imperatives in lowering emissions and addressing climate change while cultivating a just transition," said Jeff Morrison, GM VP of Global Purchasing and Supply Chain. "As we accelerate toward our vision of an all-electric future, our commitment to bringing everybody along includes our global suppliers whose collaboration is critical to promoting a sustainable, safe and better world."
"GM's ESG Supplier Pledge is a best practice example of how to work with suppliers and turn their 'Everybody In' vision into action," said Pierre-Francois Thaler, Co-CEO of EcoVadis. "These specific and actionable targets are exactly the kind of engagement needed to accelerate their value chain towards positive impact, and to make business a force for creating a more sustainable world."