General Motors Company (NYSE:GM) Q2 2020 Earnings Conference Call - Final Transcript

Jul 28, 2020 • 08:00 pm ET

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General Motors Company (NYSE:GM) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Your first question comes from the line of Joseph Spak with RBC Capital Markets.

Analyst
Joseph Spak

Thanks very much, everyone. Dhivya, maybe just to clarify that last comment on the back half EBIT, was that -- is that an auto EBIT or a total EBIT? And maybe if you could provide a little bit more color on what the implied North America EBIT would be in the back half?

Executive
Dhivya Suryadevara

So Joe, it is total Company EBIT. So, it includes auto as well as GMF. I don't want to put a specific North America number to it, but it's safe to assume that, with a 600,000 unit dealer inventory position by year-end, I think that gives you enough data points to model North America in specific.

Analyst
Joseph Spak

Okay. And then, you talked about the cash flow in the back half. I think in some other comments, you talked about potentially paying back the revolver of $16 million, so -- $16 billion. So if I'm doing the math right, it sort of seems that, if that occurs, you're back to net cash balances almost equal to, let's call it, second quarter of '19 levels or pre-strike, pre-COVID. Am I missing anything there? Or are there any other puts and takes we should be considering?

Executive
Dhivya Suryadevara

I think you're directionally correct. If you think about the first half of the year, we burned $10 billion between Q1 and Q2. And based on the scenario that I provided, in the midpoint of the range of the $7 billion to $9 billion, you can see that we're recovering a bulk of the burn in H1 of the year. So as we build the cash balance back towards our target level, Joe, that's when we would expect to pay back the revolver. Obviously, as you know, there's a ton of uncertainty that's out there. So, it's important to note that it's based on the backdrop and all the assumptions that I talked about.

Analyst
Joseph Spak

Okay. And maybe one for Mary. You talk a lot about your EV and Ultium architecture, and it sounds like you're very comfortable and excited about it. I know you have an agreement with Honda for that as well. But what we're also seeing is a lot more companies, I guess, trying to maybe break into electric vehicles or automating them. I'm wondering if you would ever consider -- or how you would sort of value the risk and opportunities, I guess, of selling kits to some of the would-be competitors.

Executive
Mary T. Barra

We think scale does matter, and we are very confident and excited about our Ultium battery platform and our cell technology. We are the only one of [Phonetic] two that are building battery cells in this country from an auto perspective. And we also have a joint development agreement with LG Chem, along with the R&D work that we have. We've stated that as we -- early -- in the early days of launching off of our new Ultium platform, we will be at or