GM Warns ‘Across the Board’ Inflation to Put a Damper on Profit

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1:59Scarlet Fu:Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube.

2:20Geetha Ranganathan:We had some more earnings. General Motors out with some numbers. They raised their profit outlook for the year by$500 million. Let's break it down with Steve Mann, Global Autos and Industrial Research Analyst for Bloomberg Intelligence. He's based down in Princeton. Steve, what have we learned from General Motors and their earnings release?

2:38Scarlet Fu:Actually, overall, their earnings was pretty good. And if this Iran war, you know, doesn't drag on, I think they're going to have a great second half. You know, inventory is low. They've managed it very well. That means their pricing is pretty steady up a bit. And truck sales are still going well despite the$4 gas prices. So second half production could ramp back up if the war doesn't drag on. If the war doesn't drag on and if the company gets the relief from paying all those tariffs, My understanding is that that increased outlook that Paul referenced does reflect the benefits of tariff cost relief tied to the Supreme Court deciding to strike down those reciprocal tariffs that President Trump imposed.

3:32Scarlet Fu:Yeah, you know, they they they had a five hundred million dollar benefit. Well, less cost from the tariff. You know, there could be more coming. And, you know, right now, their inventory is at a, you know, actually below target, especially in the pickup truck side. So, you know, and pickup trucks are the highest profit margin vehicles for them. So if they can keep production steady, you know, increase inventory, dealer inventory a bit by raising the production, you know, that 8.6 % EBITDA, adjust the EBITDA margin that they had in North America. could you know could stay up there or even get even better what's gm saying about you mentioned

4:19Geetha Ranganathan:the trucks and that's what americans we like to drive you know big trucks uh suvs all that kind of stuff here but with gas north of four dollars a barrel what's gm saying about the demand for

4:31Scarlet Fu:those big vehicles yeah they're actually very cautious uh you know the gas prices are up like Oil prices are up like$3 today, and I think that's really the impact on the consumer discretionary stocks, including GM, despite its very good earnings results. But they are very cautious, not only demand, but if elevated oil prices are staying up, it could trickle down into material costs, even though they haven't seen a huge impact from that yet. But a prolonged war could impact it. But the other thing that we've talked about is this K economy. It's very interesting to see what's happening today where the high end, expensive vehicles are actually doing well.

5:23Scarlet Fu:Where we're seeing decline is really on the cheaper vehicles where, you know, buyers in that segment are more cost conscious. And I think there are holding onto their purse strings. But like, you know, it's all about the war. Yeah, absolutely. It's all about the war that affects everyone's willingness to spend their mood when it comes to spending. What is GM offering by way of low cost vehicles? How big of a lineup offering does it really have? They do. I mean, they have, you know, the Chevrolet Trax is selling very well. You know, the Buick Envision, not bad. You know, they do have a few vehicles.

6:06Scarlet Fu:The EV Chevrolet Bolt, which they just rolled it out, is one of the most popular EVs out there. That's going to help them, you know, reduce some of the EV losses there. So they have a pretty diverse portfolio. But, you know, I think if truck sales maintain where it's at, consumer sentiment, they, you know, gets better if the war ends. And even the commercial side, if commercial demand stays steady, I think, you know, they're going to have a decent second half.

6:41Geetha Ranganathan:Ford reports tomorrow after the close. Steve, is there a read across from GM over to Ford?

6:47Scarlet Fu:Yeah, definitely. You know, Ford relies much more on their pickup truck. The F-150 is, you know, the top selling pickup trucks in the US, not just to consumers, but to the commercial commercial buyers. So it is a it is a positive read across to Ford. The only thing that's on the risk side is, you know, they had some delays on ramping up the F-150 or due to the Novellis aluminum plant fire last year. But again, look, they're going to get that aluminum shortage fixed up. And if the war ends, you know, they're going to have to ramp up the F-150 production. And that's only going to improve their unit costs and profitability in the second half.

7:41Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. For years, the conversation around Bitcoin was the same. Is it real? And does it belong in a portfolio? While others debated, CoinShares got to work. In 2015, they launched the world's first Bitcoin EDP, regulated, listed, and built for institutional investors. Long before the U.S. market caught up. Today, they manage over$6 billion in assets and have remained profitable through every market cycle, including the 2022 downturn. What sets them apart? They're not a crypto exchange chasing trading fees, not a company betting its balance sheet on Bitcoin, not a mining operation.

8:20Scarlet Fu:CoinShares is an asset manager with recurring fees, a fixed cost base, and a business model you can actually model. Now listed on NASDAQ under ticker CSHR. Learn more at coinsharesipo.com.

8:34Thank you.

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10:56Geetha Ranganathan:All right, we've got Geetha Ranganathan with us. She's a media analyst for Bloomberg Intelligence, and we're supposed to talk about Spotify, which we kind of will. Spotify reported their quarter results were good. Their guidance is a little disappointing. The stock's down 13 percent. There, I gave it to you. That's the analysis. What I want to know, Geetha, is AI and music. Is AI a threat to recorded music? I think it is, Paul. And I think that is what we're kind of seeing reflected in, you know, the Spotify stock market, stock price reaction today. So for Spotify, I mean, the way that they've generally framed this is that it is actually AI is going to be a positive for them because, you know, you have AI tools that can create more personalization, that can enhance music discovery, that, you know, can help with customization, can help with better ad targeting.

11:47So all of the things that they're saying, they're saying the right things. The problem is that they will have to obviously undertake significant investments for all of that to actually happen. So we know that Spotify already offers one of the best user experiences. This is why they have a 35 percent subscriber share of the global music market. So there's no doubt that people really love their Spotify app, but they're going to have to really invest heavily. And I think that is what the street is getting a little bit uncomfortable about.

12:18Scarlet Fu:So how exactly is AI a competitive threat here? Do people then, I mean, is the concern that people won't subscribe to Spotify because AI can serve up music better and cheaper? Or is it that AI generated music takes the place of what Spotify can offer? Yeah, it's actually a combination of both, Scarlett. So, yes, AI-generated music. And we've seen a number of platforms kind of emerge over the past few months. I mean, Suno, Udio, all of these are, you know, Suno and Udio. They're the big ones that have come up, you know, which just offer you AI-generated tracks. And people are actually tuning into those, you know.

12:57So if you just look at downloads, for instance, those have kind of been off the charts. And so there's obviously a very real fear that these can become real competitors to the traditional DSPs, to a Spotify, to a YouTube Music, to a Amazon Music. But then I think the bigger threat for Spotify is that, remember, Spotify is a pure play audio streamer. It is up against all the other big tech companies, tech companies that are already investing very, very heavily in AI capabilities. So, you know, you look at YouTube music, you look at Amazon music or you look at Apple music. These are all companies that are already going to be spending something like 700 billion dollars in capital expenditure this year just on AI developments.

13:41You know, Google, for instance, just introduced something called Lyria in, you know, Lyria 3 in March, which basically allows for AI generated music up to three minutes of a music track. And so this is a real, real risk for Spotify because now the hyperscalers can really gain market share. Wow.

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14:17Scarlet Fu:Is music then labeled AI generated or not? I don't get it. It is, but people still like it because, you know, you can. But there's no connection to anyone who's making it. Is there? Yeah, there has been. Actually, there have been a couple of AI-generated artists that have actually topped some of the Billboard charts. So it's surprising, but they've done it. So, you know, right now, still very early, but it can become a big thing pretty fast. Okay, hold on. AI-generated music cannot hold concerts, right? I mean, that's the other big part of it, right?

14:51Geetha Ranganathan:Yeah, unless you get a robot or something.

14:53Scarlet Fu:That's no fun.

14:54Geetha Ranganathan:I'm telling you, it's all coming. So, all right, so that's music. And now that brings you to probably the biggest fear in Los Angeles and Hollywood right now, which is AI created just content in general. What are the big content creators, the Disneys of the world, the Paramounts of the world, what are they saying about that? Yeah, so the really big thing that I think everybody is looking for is this big WGA contract, the Writer's Guild contract that kind of comes up in a few weeks, actually. you know, negotiations and AI is obviously supposed to be a big key topic there. So far, we've not really heard any major rumblings.

15:31I mean, yes, we've heard, you know, something from Paramount in terms of offering AI efficiencies. We've heard about Netflix talk about AI efficiencies, but nothing really significant or radical on the content creation side. So, so far, it's pretty benign, but all that can change pretty quickly too.

15:51Scarlet Fu:Keith, I've got to get your take on what's happening between President Trump and Jimmy Kimmel. Jimmy Kimmel making some jokes before the White House Correspondents' Dinner that referenced Melania being a prospective widow. He says, Jimmy Kimmel says, it was a reference to the age disparity between the president and the first lady in light of what happened over the weekend. President Trump calls it despicable and now is calling on ABC to fire Jimmy Kimmel. Is this something that could pose a threat to the company, to Disney, to ABC? Yeah, it's definitely controversial, Scarlett, and it's kind of a PR nightmare for the new CEO, Josh Tomorrow, who really doesn't have much experience in kind of navigating all of this Hollywood talent stuff.

16:31So, you know, Bob Iger, the previous CEO, obviously had had, you know, had his fair share of these moments. He kind of knew what to do. We do have Dana Walden, who is the content chief and who actually helped navigate a very similar issue a few months ago when, you know, we had a similar controversy with Jimmy Kimmel and the whole Charlie Kirk debate. She kind of obviously helped smooth things over. I don't know how things are going to play out this time, but obviously, President Trump, again, with his whole rhetoric of, you know, revoking ABC's license and Brendan Carr, who is the FCC chair, also kind of chiming in.

17:09Obviously, lots of, you know, noise, lots of political maneuvers here. But I'm not necessarily sure that anything tangible is going to happen, at least in terms of licenses. But again, it's a PR nightmare.

17:22Geetha Ranganathan:Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from Public. Lately, it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth. On Public, you can build a portfolio of stocks, options, bonds, crypto, without all the bugs or the confetti. Retirement accounts, yep. High-yield cash, yes again. They even have direct indexing.

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19:04Scarlet Fu:See how your business can get stronger and go farther with Chase for Business. Learn more at chase.com slash business. Chase for Business. Make more of what's yours. The Chase mobile app is available for select mobile devices, Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company. Here's a paradox. We buy insurance for peace of mind, yet the very policies we trust can deliver the biggest financial shocks. Across America, millions of claims are denied every year, not because people did anything wrong, but because policies quietly excluded the things that happened.

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