使用警語:中文譯文來源為 Google 翻譯,僅供參考,實際內容請以英文原文為主
Operator
Ladies and gentlemen, thank you for standing by.
Welcome to the General Motors Company fourth-quarter and full-year 2012 earnings conference call.
During the presentation, all participants will be in a listen-only mode.
Afterwards, we will conduct a question-and-answer session.
(Operator Instructions).
As a reminder, this conference is being recorded Thursday, February 14, 2013.
I would now like to turn the conference over to Randy Arickx, Executive Director of Communications and Investor Relations.
Please go ahead.
Randy Arickx - Executive Director of GM Communications and IR
Thank you, Operator.
Good morning.
Thank you for joining us as we review our 2012 calendar year results.
Our press release was issued earlier this morning, and the conference call materials are available on the Investor Relations website.
GM is also broadcasting this call live via the Internet.
Before we begin, I'd like to direct your attention to the legend regarding forward-looking statements on the first page in the chart set.
As always, the contents of our call is governed by this language.
This morning, Dan Akerson, General Motors' Chairman and CEO, will provide opening remarks, followed by a review of the financial results with Dan Ammann, Senior Vice President and CFO.
Dan Akerson will then conclude the remarks portion of our call with some closing comments.
After the presentation portion of the call, we will open the lines for questions from the analyst community.
In the room today we also have Nick Cyprus, Vice President, Controller and Chief Accounting Officer; Chuck Stevens, CFO of North America; and Jim Davlin, Vice President, Finance and Treasurer, to assist in answering your questions.
With that, I'd like to turn the call over to Dan Akerson.
Dan Akerson - Chairman and CEO
Thanks, Randy, and thank you to everyone on the call for joining us.
From every vantage Point, 2012 was another solid year for General Motors.
As you can see on slide 2, we grew both our sales and topline revenue and earned net income attributable to common stockholders of about $4.9 billion.
Special items reduced net income by about $500 million this year.
Dan Ammann will walk you through these later on the call.
Turning to our operating results, EBIT adjusted was $7.9 billion for the year, which reflects strong profit growth in many areas of the business.
North America's results tracked very close to 2011.
South America and our international operations were up year over year.
And GM Financial had record income before tax.
The $400 million year-over-year decline in EBIT adjusted was more than explained by losses in Europe.
Cash generation in 2012 was very solid.
Automotive operating cash flow was $9.6 billion, and adjusted for free cash flow was $4.3 billion.
That's up meaningfully year-over-year, reflecting our increased cash discipline.
If you'll turn to slide 3, I'd like to review some of the highlights from the fourth quarter.
I'm going to focus on initiatives that fundamentally improved our competitive position and reduced risk.
Let's start with our new products.
We planted the seeds of growth in every region around the world.
In China, as you may know, 2012 was a record sales year.
And we gained a full point in market share.
We followed this up in January by selling more than 300,000 vehicles in a single month for the first time ever.
Domestic sales of Buick, Chevrolet and Wuling brands all set new single-month records.
Going forward, our product strategy is going to become increasingly hard for competitors to defend against.
For example, in the fourth quarter, we launched the Buick Encore.
Now, this quarter, we are starting to build critical mass for Cadillac, with local production of the XTS.
We also introduced the Chevrolet Sail UVA hatchback in India.
In South America, we revealed the Chevrolet Onix, which is part of an award-winning top-to-bottom transformation that began in 2011.
In Europe, it's been exciting to watch the Opel Adam follow the Mokka's fast start, especially both vehicles are in new segments for the brand.
The Mokka has more than 80,000 customer and dealer orders.
And just a few weeks after the Adam lunch, orders from all across Europe exceeded 20,000, with most of them in Germany.
In North America, our most important product news was that reveal of the all-new 2014 Chevrolet Silverado and the GMC Sierra full-size pickups.
We're going to share more details about these products in March, but I can tell you that every element of these trucks has been improved, including durability, capability, fuel economy and refinement, which will help us leverage our 13 million strong owner base.
We've also have a transition plan to optimize our capacity, sales and market share opportunity in a growing US economy.
The GM launching these products is undeniably a stronger Company than it was even a year ago.
For example, we continue to advance our European revitalization plan and work toward our objective of achieving breakeven EBIT adjusted by mid-decade.
We strengthened the Opel management team with the appointment of Dr. Karl-Thomas Neumann as Chairman of the Management Board, effective March 1. We're bringing 23 new products to market between 2012 and 2016, while at the same time we continue to rationalize capacity and reduce costs.
For example, we recently completed the sale of our transmission operations in Strasbourg, France, and announced that vehicle production at our plant in Bochum, Germany will cease at the current Opel's and Sierra's lifecycle in 2016, assuming we finalize a German labor deal in the next few weeks.
In addition, we finalized both our purchasing joint venture with PSA and initial product development plans, which follow a logistics agreement already in place.
GM Financial, meanwhile, has moved from strength to strength.
During the quarter we announced the acquisition of Ally's operations in Europe and Latin America, and its joint venture interest in China.
When these deals close in 2013, GMF will be able to provide financing and markets that represent 80% of our sales volumes, up from about 30% today.
We will also be able to meet demand in strategic and unserved markets, all with very good risk-adjusted returns, and a smaller balance sheet than any other captive automotive finance company.
Less than a month after we announced the Ally transaction, the US Treasury began to sell down its ownership stake in GM, starting with our 200 million share buyback.
Clarity on the government sell-down strategy is important, because it will help us attract new investors, recruit the best talent, and strength in our brands.
That's why we're eager to put this chapter behind us.
But it was a fruitful period in many ways, because we honored our taxpayers' vote of confidence with hard work and discipline in a long-term approach to the business.
This is perfectly illustrated by our two other transaction that closed during the quarter, which strengthened our fortress balance sheet.
First, we successfully reduced our US salaried pension obligation by $28 billion.
Not only did we significantly reduce the form of leverage, we also enhanced the income security of our salaried retirees.
That's something that we're especially proud of.
I also note that our US plans were 84% funded at year-end, and were not expected to have any mandatory cash contributions during the next five years.
The second transaction saw us replace our existing $5 billion revolving line of credit with two new credit facilities totaling $11 billion.
This additional liquidity is appropriate for a company our size.
What made it a landmark deal with the fact that we earned investment grade pricing and investment grade terms and conditions.
It was clearly a vote of confidence in GM and the progress we've made.
Now I'll turn the call over to Dan Ammann to review our results in more detail.
And I'll rejoin the discussion at the end of the call with some final comments.
Thanks.
Dan Ammann - SVP and CFO
Thanks, Dan.
On slide 4 we provide a summary of our 2012 calendar year GAAP and non-GAAP results.
Net revenue for the year was $152 billion, up 1.3% from the prior year.
Excluding the impact of FX translation, revenue was up 3.8% for the year.
GAAP operating income was a large loss, due entirely to special items, which we'll review in a few minutes.
Net income to common stockholders was $4.9 billion, and earnings per share came in at $2.92.
The decline from the prior year was largely due to unfavorable special items this year versus favorable last year.
Our automotive net cash from operating activities was $9.6 billion, a $2.2 billion increase from 2011.
For our non-GAAP measures, EBIT adjusted was $7.9 billion in 2012, and the EBIT adjusted margin was 5.2%, as improved performance across most of the business in 2012 was offset by the challenging environment in Europe.
Finally, our adjusted automotive free cash flow was $4.3 billion for the year, a $1.3 billion improvement from 2011, reflecting improved cash conversion and our increased focus on this area in 2012.
On slide 5, we provide EBIT adjusted by region for 2011 and 2012.
GMNA's EBIT adjusted had a slight decline to $7 billion, as improved underlying performance was offset by $800 million of lower pension income.
GME had an EBIT adjusted loss of $1.8 billion, down more than $1 billion from 2011 due to the very challenging market conditions.
GMIO had EBIT adjusted up $2.2 billion, as growth in the region continued.
And GM South America's EBIT adjusted was a much improved $300 million for 2012, as the business continued its favorable profit improvement on the back of a new product portfolio.
GM Financial had earnings before taxes of $700 million, a record result.
And corporate and eliminations was a $500 million expense.
This totaled to EBIT adjusted of $7.9 billion, down $400 million from 2011.
On slide 6, we provide an explanation of the $400 million decrease in year-over-year EBIT adjusted.
Our EBIT adjusted was $8.3 billion for 2011.
Volume was $1 billion favorable due to increased production in North America and IO, partially offset by a decrease in Europe.
Mix was unfavorable $600 million due to a continued shift to smaller vehicles in North America and Europe.
Price was $1.7 billion favorable for the year due to the strength of our new product introductions and near price increases on the vehicles that were launched in prior years.
Total costs were up $2 billion, including $800 million in reduced pension income and $1 billion from additional material content in our new product programs.
Importantly, fixed costs excluding pension, were approximately flat in 2012 relative to 2011.
Other was $500 million unfavorable, primarily due to an absence in 2012 of favorable lease residual adjustments in North America.
Slide 7 identifies special items for the fourth quarter and calendar year that had an impact on our earnings per share.
I'll highlight a few of the major items momentarily.
At the top of the slide, our net income to common stockholders in the fourth quarter was $900 million, and our fully diluted earnings per share was $0.54.
The special items listed had a net $100 million favorable impact to net income to common stockholders, or a $0.06 per share favorable impact on EPS.
For the 2012 calendar year, our net income to common stockholders was $4.9 billion, and our fully diluted earnings per share was $2.92.
Special items had an unfavorable impact on net income to common stockholders of $500 million, and a $0.32 unfavorable impact on earnings per share.
On the next slide, we review our larger special items for the quarter and the year.
As a result of three full years of profitability and our recent completion of our business plan, which indicated continued profitability, we reversed the majority of our deferred tax valuation allowance in the US and Canada and recorded a $34.9 billion non-cash benefit.
This reversal triggered an associated offsetting non-cash goodwill impairment of $26.2 billion.
Last quarter, we indicated we may impair assets in GM Europe if economic and business conditions continued to deteriorate.
Unfortunately, the industry outlook and other factors have deteriorated.
And we're now impairing our long life assets in Europe and recording a $5.2 billion non-cash special item.
We continue to work towards our objective of breakeven EBIT adjusted by mid-decade.
Also, as we discussed during the third quarter earnings call, we recently completed the annuitization and lump sum agreements for the US salary pension plan.
Together, these items resulted in an after-tax charge of $2.2 billion in the quarter to settle the $28 billion obligation.
Moving on to the results for the fourth quarter, on slide 9, our net revenue was $39.3 billion, a $1.3 billion increase from the prior year.
Excluding the effect of FX translations, fourth-quarter revenues increased approximately 4.3%.
Again, the GAAP operating income performance was driven by unfavorable special items in the quarter.
Net income to common stockholders was $900 million, a $400 million improvement from 2011.
Earnings per share for the quarter were $0.54 on a diluted basis, compared to $0.28 for the same period in the prior year.
And our automotive net cash from operating activities was $500 million.
Our EBIT adjusted was $1.2 billion for the fourth quarter, a $100 million improvement from the prior year.
The EBIT adjusted margin was 3.2%, up slightly from Q4 2011.
Our adjusted automotive free cash flow was $1.1 billion for the quarter, a $1.3 billion improvement from the prior-year period.
On slide 10, we provide the EBIT adjusted by region for the four quarters of 2011 and 2012.
GMNA's EBIT adjusted was at $1.4 billion.
GME had an EBIT adjusted loss of $700 million.
IO had EBIT of $500 million.
And South America was $100 million for the quarter.
GM Financial earnings before tax rounded down to $100 million, a slight decrease from the prior year.
Corporate and Eliminations was a $200 million expense.
This totals to EBIT adjusted of $1.2 billion for the fourth quarter of 2012, up $100 million from the same period in 2011.
Slide 11 shows our consolidated EBIT adjusted for the last five quarters.
At the bottom of the slide, we again show the revenue and margins for the quarter.
Our global production numbers, including our unconsolidated joint ventures, was 116,000 units higher than the fourth quarter of 2011.
Our global market share remained fairly steady at 11.5%.
On slide 12 we provide an explanation of the $100 million increase year-over-year consolidated EBIT adjusted for the fourth quarter.
In Q4 2011, our EBIT adjusted was $1.1 billion.
Volume was $300 million favorable, due to production increases in North America and IO.
Mix was $300 million favorable, due primarily to improving mix in GMNA.
Price was $100 million unfavorable for the quarter, as the effect of competitive pressures on our older vehicles more than offset the favorable pricing of our newer products.
Total costs were up $500 million, which includes a $200 million reduction in pension income and $300 million in increased material costs of our recently introduced cars, trucks and SUVs.
Other was $100 million favorable due to increased equity income from our nonconsolidated joint ventures.
This totals $1.2 billion for the fourth quarter.
We now move on to our segment results, with the key performance indicators for GM North America on slide 13.
For the fourth quarter of 2012, our total US market share was 17.1%.
Our retail incentive levels on an absolute basis are roughly flat versus the prior-year period.
On a percentage of ATP basis, our incentives for the quarter were 10%, equal to the prior year.
This puts us at 104% of industry average levels for the fourth quarter of 2012.
On slide 14 we show GMNA's adjusted EBIT adjusted for the last five quarters.
At the bottom of the slide, revenue was $24.2 billion in the fourth quarter, up $1.1 billion from the same quarter in 2011.
GMNA's EBIT adjusted margin was 5.8% for the fourth quarter, down 0.7 percentage points from the prior year, due to decreased pension income.
Our US dealer inventory was 117,000 units at the end of the fourth quarter.
The increase from the prior year includes 28,000 all-new Cadillac ATS's and XTS's that were not included in the prior year; as well as increased production of current-generation full-size pickups, in preparation for this year's launch of the all-new Silverado and Sierra.
GMNA production was 775,000 units for the quarter; a 36,000 vehicle increase from the prior year.
Turning to slide 15, we provide the explanation of the $100 million year-over-year decline in GM North America EBIT adjusted.
GMNA's EBIT adjusted was $1.5 billion for the fourth quarter of 2011.
Volume was $100 million favorable.
Mix was $400 million favorable, due to the recent introductions of the Cadillac ATS and XTS, and increased production of other higher-margin vehicles.
This is the first time in nine quarters that GMNA has benefited from favorable mix, and underscores the importance of our new model launches.
Price was $300 million unfavorable, due primarily to the effect of pricing actions on our older vehicles for the quarter; and as we set up for 2013.
Costs were $400 million unfavorable, due to a $200 million decline in pension income; $100 million in increased costs for our new vehicle launches; and $100 million increase in D&A.
This nets to an EBIT adjusted of $1.4 billion.
On slide 16, GME reported an EBIT adjusted loss of $700 million for the fourth quarter, a $100 million deterioration from the prior year.
Revenue was $5.6 billion for the quarter, down $700 million due to declining industry sales, unfavorable foreign exchange, and a small loss of share.
The EBIT adjusted margin in the region was negative 12.5%.
GME's production for the quarter was 209,000 units, 40,000 less than the prior year, as we continue to take actions to reduce inventory.
GME's market share in the fourth quarter was 8.3%, a 0.3 percentage point decline from 2011.
On slide 17, we provide the major components of GME's $100 million year-over-year decline in EBIT adjusted.
Volume was $100 million unfavorable.
Mix was $200 million unfavorable, due largely to a shift in sales to lower-margin countries.
Price was $100 million unfavorable due to competitive pressure in the region.
Cost was $200 million unfavorable because of $100 million unfavorable material price performance, and $100 million in lower restructuring charges.
This totals to GME's adjusted EBIT adjusted loss of $700 million for the fourth quarter of 2012.
On slide 18 we show GMIO's EBIT adjusted for the most recent periods.
In the fourth quarter, EBIT adjusted was $500 million, including equity income from our joint ventures (technical difficulty).
At the bottom of the slide, GMIO's revenue from our consolidated operations was $7.9 billion, up $900 million from the prior year.
GMIO's EBIT adjusted margin from consolidated operations was 0.5%, a decline from the prior year, largely driven by increased costs, which we'll cover in a moment.
Our average net income margin from our China JVs was 9.1%, a 0.7 percentage point increase from the prior year.
GMIO's total production for the quarter was up 124,000 units from the prior year, as we increased our market share to 9.8% in a growing industry.
Our market share in China rose more than 1 percentage point in the fourth quarter, to 14.3%.
Turning to slide 19, we provide the major components of GMIO's $100 million increase in EBIT adjusted.
The impact of volume was $200 million favorable due to increased wholesale units and to the consolidation of GM India in 2012.
Mix was $100 million unfavorable.
Price was $200 million favorable due to our recently launched products, including the all-new Chevrolet Colorado and Trailblazer.
Cost was $400 million unfavorable due to a $200 million increase in material and manufacturing costs for newly launching vehicles; $100 million in decreased sales of CKD vehicles; and some other items, including the consolidation of our India operations.
Other was $200 million favorable, including $100 million increase in equity income.
This totals to GMIO's fourth-quarter 2012 EBIT adjusted of $500 million.
On slide 20, we move on to the South America region and look at EBIT adjusted for the last five quarters.
Excluding restructuring costs, the region was profitable in all four quarters of 2012.
At the bottom of the slide, revenue was $4.5 billion in the fourth quarter, a $300 million increase from 2011.
EBIT adjusted margin in the region was 2.2%, a significant improvement from the loss in the prior-year period.
GMSA's production was 223,000 units, roughly flat to the prior year.
Market share in the region was 17.7% in the quarter, a 0.7 percentage point decline from the prior year.
On slide 21, we look at the components of the $300 million year-over-year improvement in our South American operations.
In the fourth quarter of 2011, the region had an EBIT adjusted loss of $200 million.
The small production variance had no impact.
Mix was $200 million favorable, due entirely to the higher margins for recently launched vehicles.
Price was $100 million favorable.
Cost was $100 million favorable, due to the absence of a restructuring charge incurred in the fourth quarter of 2011.
This totals to $100 million EBIT adjusted for South America in the fourth quarter.
Slide 22 provides our walk of adjusted automotive free cash flow for the fourth quarter.
We now exclude the impact of major voluntary management actions, such as the repurchase of our common shares from the US Treasury or our voluntary pension contributions, and we'll continue this practice going forward.
After adjusting for noncontrolling interest, preferred dividends and undistributed earnings allocated to Series B preferred, and deducting GM Financial, our automotive income was $800 million for the fourth quarter of 2012.
We had $300 million in net non-cash special items, and our D&A was a $1.6 billion expense.
Working capital was a $1.5 billion source of cash, due to seasonal decrease in inventory because of sequentially lower production, as well as an overall increased focus on working capital management.
Excluding the non-cash impact of the annuitization and lump-sum transactions in the US, pension and OPEB payments exceeded expense by $2.5 billion.
Other was a $500 million use of cash, a $300 million improvement from the prior year.
This totals down to automotive net cash provided by operating activities of $500 million.
We had $2.1 billion of capital expenditures in the quarter.
In addition, we had two voluntary management actions that we have excluded from our adjusted free cash flow, our $2.3 billion pension contribution, and the $400 million premium we paid to repurchase shares from the US Treasury.
This totals to our adjusted automotive free cash flow of $1.1 billion, a $1.3 billion increase from the prior year.
On slide 23 we provide a summary of our key automotive balance sheet items.
After repurchasing 200 million shares of stock from the United States Department of the Treasury, we finished the fourth quarter with $26.1 billion in cash and marketable securities.
With the completion of our new three- and five-year credit facilities, our available credit facilities now stand at $11.1 billion, bringing our total available liquidity to $37.2 billion.
Please note, we changed our disclosure this quarter to exclude uncommitted credit facilities from these totals.
Our book value of debt is $5.2 billion.
The $400 million decrease from the third quarter is due to partial redemption of GM career preferred shares.
Series A preferred stock is $5.5 billion, and our US qualified pension plans are underfunded by $13.1 billion, a slight improvement versus a year ago, which we'll discuss further in a moment.
Our non-US pensions are underfunded by $13.8 billion at the end of the fourth quarter, and our unfunded OPEB liability is $7.8 billion.
The increase in these liabilities from the prior year is largely due to lower discount rates.
On slide 24 we take a look at the funded status of our US pensions in 2012.
At the end of 2011, we had pension obligations of $108 billion and we were underfunded by $13.3 billion.
The combined effects of remeasurements; our 11.6% asset returns; and other items, resulted in a $100 million improvement to funded status.
We paid out $8.3 billion in benefits to GM retirees and surviving spouses in 2012.
The annuitization agreements and the lump sums offered to salaried retirees resulted in a $28.3 billion reduction in the pension obligation, and a $30.6 billion transfer of pension assets, for a net decrease of $2.3 billion in the funded status.
Finally, we made a $2.3 billion cash contribution to the US salary plan.
This was less than the $2.6 billion estimate provided last quarter and meaningfully below the original estimate of $3.5 billion to $4.5 billion, as asset returns were more favorable than previously estimated, lowering the total cost of the annuitization agreement.
Our total US pension obligations were reduced 25%.
Our funded status improved to negative $13.1 billion, slightly better than 2011.
Slide 25 provides a summary of our auto financing activities.
GM Financial reported their results this morning and will be holding an earnings conference call at noon.
Our US subprime penetration the fourth quarter has increased over the prior year to 7.2%.
Our US lease penetration is 14.9% in Q4, up 3.9 percentage points from the prior year.
Lease penetration in Canada is at 6.3%, down from the prior year due to a heavier mix of prior-year models in the fourth quarter of 2012.
We're below the least industry average in part because we have a richer mix of trucks than many of our competitors.
GM new vehicles as a percentage of GM Financial originations stayed relatively constant, at 43%.
And GM Financial's percentage of the GM's US consumer subprime financing and leasing was 20% in the quarter.
GM Financial's annualized net credit losses remained low, at 3.3%.
And their earnings before tax were $146 million for the quarter, down slightly a year ago, predominantly due to expenses related to the acquisition of Ally's international operations, which is expected to close in 2013.
I'd also like to highlight that GM Financial announced in January the pricing of a $1 billion asset-backed securities offering with a weighted average coupon of 1.2%.
This is the lowest cost of funds in GM Financial's history.
We will now give an updated view on a few 2013 items on slide 26.
Now that we reversed the valuation allowance on deferred taxes in the US and Canada, our effective tax rate for GAAP purposes will be approximately 35% in 2013.
This action does not affect the status of our operating loss and tax credit carryforwards.
And, accordingly, our cash taxes for 2013 are expected to be at about the same rate as 2012.
We expect to have approximately $600 million in reduced GME depreciation and amortization expense in 2013, due largely to the impairment of long-lived and intangible assets in GME.
These reduced D&A expenses were not incorporated into our previously provided outlook for 2013.
Under current economic conditions, we don't expect to have any mandatory contributions to our qualified US pension plans for at least five years.
Also, at the same time, we do not have any plans to make -- any current plans to make material pension contributions in 2013, although we will continue to evaluate any opportunistic actions on an ongoing basis.
We expect CapEx this year to be similar to the $8 billion level we spent in 2012.
Finally, we expect to have a $200 million unfavorable special item in the first quarter of 2013 for the recent devaluation of the Venezuelan currency.
Now, I'll hand it back to Dan for his closing remarks.
Dan Akerson - Chairman and CEO
Thanks, Dan.
On prior calls, I've talked about playing offense with products designed to win, not just compete.
This strategy was in full display at the North American International Auto Show in January.
The energy around GM was infectious.
In fact, Detroit may have been the Company's best auto show since the halcyon days of the 1950s.
The Corvette Stingray won Best in Show.
The Cadillac ELR was named Best Design.
And that Cadillac ATS took home the North American Car of the Year honors.
Interestingly, the first win ever for Cadillac.
All of this is great.
But in many ways, we are really just getting going.
Between 2013 and 2016, we will refresh our North American portfolio at twice the rate we did during the last three years.
The Chevrolet Silverado and the GMC Sierra are only the tip of the iceberg.
We are redesigning other foundational products, like the all-new Chevrolet Impala.
And we are aggressively entering new segments with vehicles like the Buick Encore.
The same holds true for the Chevrolet product line in South America, where we went from having one of the oldest portfolios in the industry to one of the newest, over the span of about 18 months.
This includes the aforementioned Chevrolet Onix, which earned Car of the Year honors in Brazil.
In Europe, we're not just cost-cutting our way to profitability, as we've said many times.
In Russia, we are investing $1 billion to expand capacity, because we expect the industry there to surpass Germany by 2017.
In China, we are investing aggressively in all facets of our business, especially Cadillac and Chevrolet, because the market could reach 30 million units by 2020.
That's up from 19 million today.
All of this and more is possible because of our profitability, fortress balance sheet, and solid cash flow.
We still have a lot of work to drive down our variable cost and wring complexity out of the system.
But with $8 billion in annual investments and our drive for results, GM is setting the stage for more than just higher volumes, market share and profits.
We're out to create a sustainable, competitive advantage, and I'm pleased with our progress.
Our next steps are crystal clear -- stay disciplined financially and operationally; sharpen our focus on customers; and continue to play offense with new products.
Thank you.
And now, let's open the line for Q&A.
Operator
(Operator Instructions).
Brian Johnson, Barclays.
Brian Johnson - Analyst
Good morning.
Well, I may be the only other person other than Dan who actually had a Corvette in -- Corvair, excuse me -- in their past, so I remember that car.
I just want to go through this quarter in light of your guidance, region by region.
And both to Dan any big changes -- when we look at North America and Europe in particular, how much of the improvement in Europe, not counting the depreciation, is within your control?
And how much depends on overall market development?
And really the same for North America, thinking about where you have guided for SAR, the kind of pickup truck mix you had in mind.
And then for Dan Akerson, around that -- what is your sense of Europe right now in terms of your 2- to 3-year goals?
And with the new team in place, how much is really in your control, versus how much is dependent on competitors taking out capacity and improving the price point?
Dan Ammann - SVP and CFO
It's Dan Ammann.
I'll address your first euro question, and I'll hand it to Chuck for North America, and then to Dan in response to your last question.
I think, as we look at the environment for 2013, really as we talked about a few weeks back, and as we talked about back at Q3, we see the industry down this year.
We'll obviously find out by how much as we go through the year, but our view on the industry has not gotten any more bullish.
Let me put it that way.
As it relates to the things we control, I do think we feel better about and better about the things that we control.
We feel very good about the team that we now have on the ground, with KT Neumann joining, in addition to all the other changes we've made over the course of the last year.
We feel pretty good about receptivity of the new vehicle launches into the market.
I think, as Dan commented, we have 80,000 orders for the Opel Mokka; 20,000 orders in already for the Adam, which is barely even getting going yet.
And those vehicles, from a profit contribution point of view, will be quite favorable relative to the balance of the portfolio there.
So we feel good about that, and what we control on the product side.
We feel good about the progress we're making on the cost side of the business -- capacity actions; consolidating from three Astra plants to two; the runout at Bochum; the sale of the Strasbourg transmission facility, and so on.
We feel good about the progress on the SG&A front.
So the things that are in our control, we feel like we're making good progress on.
The great unknown of course is what happens in the European economies; what happens to end-market demand, and the nature of where that demand is.
Profits are different by country, different by channel, and so on; and obviously that's not within our control.
And we'll need to play that out as we go.
Chuck Stevens - CFO, GM North America
Yes, Brian, relative to North America -- I guess your question was related to the industry -- and nothing has changed from the outlook that we provided a couple weeks ago.
We're looking at the industry 15 million to 15.5 million total; truck segment share, 11% to 11.5%; and our share of trucks, somewhere in the range 36% to 38% for the year.
Relative to the other drivers that we talked about back in January, I think our view is still consistent with that.
Brian Johnson - Analyst
And on the -- just a technical point -- on that GM Europe mid-decade breakeven, is that now breakeven plus $600 million, with the depreciation?
Or was this $600 million at some point contemplated within that breakeven number?
Dan Ammann - SVP and CFO
When we provided those outlooks, they were excluding the impact of the $600 million.
Brian Johnson - Analyst
Okay, thanks.
Dan Akerson - Chairman and CEO
Let me just -- you asked the question, how much is within our control?
I thought Dan did a pretty good job.
But it's not like we're just hoping for the best.
One thing we can't control is the market.
But we have certain levers we can pull.
The PSA agreement for both logistics and purchasing will kick in.
And also we're going to do, as you know, co-development on the MPV-B, MPV-C, and the B-segment cars.
That should, in the out years -- toward the middle of the decade and on -- should benefit the joint venture by about $2 billion over that period of time.
We're going to be smart about how we cut costs.
It isn't just close plants.
We closed Antwerp in 2011; that was a big deal.
And it actually afforded us some leeway in the early part of 2011, where we were actually profitable.
And then the European crisis kicked in in the summer of 2011.
I think what you see when we sold Strasbourg, and -- why did we sell it?
Well, it was cheaper to take a write-down of $100 million than it was to pay for the labor discontinuity and the costs associated with that.
I think that's a smart move.
In the interim, in the last year -- as I said, and Dan touched upon it, too -- Bochum will play out because Zafira is not going to be assigned to the plant after the 2016 timeframe.
So, we're still in the midst of labor negotiations; we hope to wrap up relatively quickly, certainly within this quarter is our hope.
So we'll have more to report on that.
In the meantime, we've also reduced headcount in Opel, about 2500 people last year.
And we're doing that -- we're just trying to reshape, remold the cost, the SG&A -- the cost profile that we project.
And we think it will be about the same sort of reduction this year.
We continue to work; it's a work in progress.
At the same time, we can't just play defense.
We're trying to play offense.
And we're into new segments that we've never been in before -- the Adam and the Mokka represent two new segment entries.
And we have to continue to do well in the segments we're in.
So, with all this -- and I know it's kind of a wide mosaic that I've tried to characterize, or portray here -- it's our objective to hit breakeven by mid-decade or thereabouts.
Brian Johnson - Analyst
Okay, thanks.
Operator
Rod Lache, Deutsche Bank.
Rod Lache - Analyst
Good morning, everybody.
I was hoping, first, you can explain two items on the North American year-over-year bridge.
In the deck, it shows a $100 million impact from volume.
Production was up about 36,000 units, which would imply about $2800 a vehicle, which is a bit lower.
The past seven quarters have been about $6000 to $9000 a vehicle.
And you also mentioned in your commentary on North America that pricing actions set you up well for 2013.
Was there any one-time pricing adjustment recorded in this quarter?
You did make some adjustments on the Malibu, for example.
Chuck Stevens - CFO, GM North America
Yes, let me take that.
Rod, it's Chuck.
From a volume perspective, production was up 36,000 units.
Wholesales, however, were up 21,000 units.
And when you factor in the impact of variable manufacturing, that brought the overall volume impact to about $138 million on 20,000 units.
So I think that's relatively consistent with the variable margins we have reflected in the past.
Relative to pricing, when you think about Q4, the economic price in Q4 year-over-year was kind of flat.
MSRP increases offset increase in sales allowances.
And MSRP increases on both carryover and new product.
The big driver of the unfavorable price was stock adjustments, primarily driven by the recognition of the GMT900 transition; and likely increased the incentives as we move through the next six months on that.
So, that was the primary driver of Q4 price.
Rod Lache - Analyst
Okay, so there was a retroactive adjustment to inventory that you had, which might have been unusually high.
Chuck Stevens - CFO, GM North America
It is essentially topping up the anticipated liability on inventory on hand, in total, for expected incentives going forward.
Rod Lache - Analyst
Okay.
And I was hoping you might be able to fill in a few blanks on Europe.
How much was the nonrecurring impact that you incurred from inventory destocking?
You've commented on some pretty big numbers that you took down, which presumably doesn't recur that this year.
And then, the negative side, how are you thinking about FX moves and pricing?
Looks like Europe pricing was maybe $1400 a vehicle this quarter.
Should we be thinking something similar into next year?
Dan Ammann - SVP and CFO
On the inventory side, we hit our objective for the year-end inventory for the Company, which was under 100,000 units.
So we think we've set ourselves up in reasonable shape going forward on that.
In terms of how much of that is recurring, this is a nonrecurring piece.
Obviously it's just going to be a function of what happens to demand.
But, going forward, our goal is to keep inventory in and around where it is.
Obviously there's seasonal moves within there; but on an overall basis, keep that roughly in line.
And, sorry, could you report the second part of the question?
FX, yes.
FX, obviously we're seeing some strengthening of the euro.
That hurts relative to the UK market and the sterling there.
It's a favorable relative to imported product, particularly what we are importing from Korea.
So I'd say overall, a strengthening euro is a headwind, as of right now.
But we'll continue to track it, and adjust course accordingly.
Rod Lache - Analyst
Okay.
And on pricing?
It looked like pricing was about $1400 a vehicle in the quarter.
Dan Ammann - SVP and CFO
Yes, pricing -- we're continuing to managing manage pricing actions in conjunction with what's going on in the market.
We're obviously looking to make up as much as we can on the new product launches that we have going on in the marketplace.
Too soon to tell exactly how pricing is going to unfold for the year at this point.
Rod Lache - Analyst
One last one -- I was hoping, or wondering, whether you might care to comment a little bit on the shape of this year's, 2013, earnings.
Presumably you're going to be facing some launch costs and pricing actions in North America in the beginning of the year.
And then things get better.
Any broad commentary you'd be willing to provide on what we should be expecting, unusually this year?
Dan Ammann - SVP and CFO
I don't think there's going to be anything too unusual.
I think you may see things a little more back-end loaded, especially out of the first quarter, than we've seen in previous years.
It's not a huge change.
But I'd say there is some more weighting to the middle in the back end of the year.
Dan Akerson - Chairman and CEO
Yes, another dynamic in there, too, as well, Rod, is our full-size SUV plants were down three weeks in the month of January for part of the conversion.
So that's going to have a bit of an impact in Q1.
And as Dan mentioned, I think we'll see a bit more weight in the second half of the year versus the run rate over the last three years.
Rod Lache - Analyst
Great.
Thank you.
Operator
Itay Michaeli, Citigroup.
Itay Michaeli - Analyst
Great, thank you.
Good morning.
Just want to talk about the pension.
You're indicating that you're not expecting to make any voluntary contributions.
Can you update us on your latest thinking around potential de-risking actions for the hourly plans in the US?
Dan Ammann - SVP and CFO
Well, I'd say overall, with our total de-risking strategy, we've come a very long way over the last couple of years with a whole host of actions, all of which we've talked through here multiple times.
And I think where we ended the year we feel very, very good about in terms of having got the salary deal done; all of the other actions that we've taken.
And it gives us a level of flexibility that we would not have otherwise had at this point in time.
As we mentioned in our comments, we have five years, we expect, with no mandatory contributions.
And what that does for us is it gives us a lot of flexibility.
We'll continue to look at opportunities to further de-risk, for sure.
It's our goal to further de-risk as we move along.
And if something compelling comes along, we'll act on it.
But I think that what we're really signaling here is, because of the actions we've taken, we feel like we've made a lot of progress.
And we're in a position where we have a fair amount of flexibility.
But we will still act if something interesting comes along.
Itay Michaeli - Analyst
Absolutely.
And then going back to taxes, the cash tax rate should be pretty similar, 2013 versus 2012.
As we think about the cash taxes beyond 2013, is there a certain rate we should be modeling in terms of the out years?
Or is there a better way of thinking about cash tax benefit relative to the higher effective GAAP tax rate?
Dan Ammann - SVP and CFO
Well, in 2012 we were roughly 10%.
And we're signaling that we would expect that to hold for 2013.
And I think for the next few years beyond that, it would be similar to that.
Itay Michaeli - Analyst
Great.
And then, lastly, how should we think about working capital in 2013?
As hopefully production starts to come back a bit in the second half of the year, perhaps in Europe, should that be less of a headwind, maybe even a tailwind for you in 2013?
Dan Ammann - SVP and CFO
Well, we had some reasonable performance in -- tailwind from an earnings point of view, or a cash point of view?
(Multiple speakers)
Itay Michaeli - Analyst
Cash flow for working capital.
Dan Ammann - SVP and CFO
From a cash flow point of view, we continue to see opportunity.
We made some progress in 2012 relative to our original plans for the year on that front.
And we brought more discipline and a pretty keen focus on that, and we are seeing the benefits of that, month-to-month.
So we continue to see opportunity on that in 2013.
What I would point out is, as most of you will know, is that typically Q1 is a sizable outflow from working capital.
And then Qs 2, 3, through the middle of the year, it tends to be more neutral.
And then we get a sizable pickup in the fourth quarter, based on shutdowns and so on.
And we do expect that seasonal pattern to continue this year, hopefully with some overall improvement underlying that.
Itay Michaeli - Analyst
That's great.
Thanks so much, guys.
Operator
Patrick Archambault, Goldman Sachs.
Patrick Archambault - Analyst
Yes, thank you, good morning.
I have a cash question and a Europe question.
First, on the cash question -- it looks like, if you were to generate something close to what you generated this year, or maybe slightly above, you would be back into the $30 billion cash range.
And you've stated that, at least for 2013, there is no voluntary contributions required.
So, can you maybe walk us through what the remaining cash calls are, on what seems to be a fairly sizable piece of liquidity there?
And if there's any room for additional shareholder actions potentially throughout this year.
Dan Ammann - SVP and CFO
There's a couple that are fairly obvious.
One is the closing of the Ally financial transaction.
What we said at the time was that there would be a about a $2 billion cash contribution from the motor company to the finance company to close that; so that's one number.
Secondly, we pay about -- and this gets lost in the mix sometimes -- we pay about $900 million a year in preferred dividends; so that's another call on that.
Our mandatory convertible, which is a piece of that, will convert at the end of this year, so that will go away going into next year, into 2014.
We have the Series B, the VEBA preferred, that's out there.
That becomes callable at the end of 2014, and that's a very expensive piece of paper.
And that's something that we would like to redeem as soon as it's reasonably able to be done.
So that's something; it's not this year, but it's out on the horizon.
And then we have potential other voluntary pension actions, should interesting opportunities come along on that front.
So there are a handful of known and identifiable items out there.
And, obviously, we'll overlay on that opportunities from a shareholder point of view.
We took, from our perspective, a very major step in that direction, around the UST buyback at the end of last year; and we thought brought good balance to the way that we're deploying cash.
Patrick Archambault - Analyst
Okay.
Thank you.
Very helpful.
And then on to my question on Europe.
Maybe two things.
Number one is, it's been written in the press -- I don't know if it's out, but -- that the cooperation with PSA has downshifted a bit.
There is no longer the D-segment program.
I think it's the B, and then some SUVs.
My first question would be, why the narrowing of the scale of cooperation, just given the need for variable cost efficiencies down the road?
And then, number two is, what's the prognosis, perhaps, for bringing some Chevrolet stuff into your Opel facilities -- things like the Cruze or a Chevy version of the Mokka, or something like that?
Thank you.
Dan Akerson - Chairman and CEO
This is Dan Akerson, I'll answer that.
I think a wise man once said, you can't believe everything you read.
And there's a great ad on television about -- gee, I read it on the Internet, it's got to be true.
Don't take too much stock into what you read.
A lot of people like to talk.
All good, robust, and healthy joint ventures are based on self-interest.
And when you can't pencil a car like the D-segment car in, for either party, then you shouldn't do it.
This isn't some sort of fraternity here.
It's a cold, calculated business deal.
We respect the PSA folks a lot, and the relationship is good.
From a manufacturing point of view, whether we would shift around the globe and bring Chevrolet to Europe or (technical difficulty), we won't comment on.
That is something we look at on a routine basis.
But we're not going to wash our laundry in the public about what we may or may not do.
I apologize for that.
Patrick Archambault - Analyst
Okay, great.
Thank you very much.
Operator
Chris Ceraso, Credit Suisse.
Chris Ceraso - Analyst
Thank you.
Good morning.
Quick question about the consolidated portion of IO.
Do you have a number there, Dan, on the adjusted EBIT?
And it looks like it was a bit of a downshift from the previous run rate.
Can you explain what the weakness there was?
Dan Ammann - SVP and CFO
Yes, as I said in my prepared remarks, it was down a bit from the previous run rate, mostly due to the timing of some cost items in there.
I will say that, as we covered in January, that we do see margin pressure in the IO business this year, some of that driven by currency and the strengthening of the Korean won.
We have a big manufacturing base in Korea, as you know.
Not as big as some, but bigger than others.
So we see some currency headwinds there that will bring some pressure on the cost equation, relative to the revenue equation.
Chris Ceraso - Analyst
Okay.
Can you give us a feel for some of the big-picture cost items as we walk from 2012 to 2013?
What are you thinking about material cost?
What is your expected change in pension expense; other structural cost changes?
In addition to -- you mentioned explicitly the $600 million in the amortization.
What are some of the other big puts and takes from 2012 to 2013?
Dan Ammann - SVP and CFO
This is for the whole Company, or --?
Chris Ceraso - Analyst
Yes, I guess for North America; and then, if there is anything specific beyond that for other regions, that would be helpful.
Dan Ammann - SVP and CFO
Chuck can comment briefly.
We don't want to get into a modeling exercise here, line item by line item.
And we gave a fair bit of color, back in the -- at the meeting in January.
But, I don't know, Chuck, if you want to --
Chuck Stevens - CFO, GM North America
Yes, I think directionally, as we talked back in January, there's -- material performance, freight performance, will be relatively flat.
Obviously there's going to be material cost increases associated with new product launches that will be more than offset by price.
From a fixed cost standpoint, as we talked about, three big drivers -- I think there's going to be reduced pension income year over year, that we talked about before, non-cash.
D&A will be up, primarily tooling associated with the new programs; another non-cash item.
And we are investing a significant amount of money and incremental marketing in 2013 to support new product launches, as well as improve our share of voice.
So, those are the three big fixed cost drivers year over year, a couple of the non-cash.
Chris Ceraso - Analyst
You don't want to go into any specific numbers around those?
Chuck Stevens - CFO, GM North America
No.
Chris Ceraso - Analyst
No, okay.
And then on Europe, you were very clear in the text that the $600 million is added to the earlier guidance.
But you also mentioned that you decided to take that action because things deteriorated.
So, if the previous guidance was that Europe would be better in 2013 than 2012, is it better again by $600 million?
Or is the underlying worse than you thought just a few weeks ago?
Dan Ammann - SVP and CFO
Well, I guess I'd say it this way, which is -- back in Q3, we said two things.
We said we'd have an objective to break even by mid-decade, and that we saw an opportunity for a slight improvement in 2013 relative to 2012.
So that's what we said on the outlook.
And then we separately said that there is a chance that we may impair our long life assets in Europe.
So, we said all of that together in the third quarter.
As we've gone from Q3 through Q4, we've seen -- as expected, we've seen a deterioration in the environment in Europe from and in industry perspective, from an economic perspective, from a fourth-quarter topline perspective.
And that led to the impairment analysis and then the impairment charge that we're showing there.
So, in that outlook we provided, the $600 million D&A savings was not incorporated into that outlook.
Chris Ceraso - Analyst
And then, the last one, you guided to 35% tax rate.
Ford has been running at about 32%.
They are a full year into not having the valuation allowance.
Is there anything that's materially different about your mix of profit that would argue for a higher tax rate for you?
Dan Ammann - SVP and CFO
From our perspective, 35% is an estimate of where we'll be.
We don't have the benefit of tax benefits on our European losses, for example, whereas I think they do.
So that could be something that's the difference between the two.
Chris Ceraso - Analyst
Okay.
Thank you very much.
Operator
John Murphy, Bank of America Merrill Lynch.
John Murphy - Analyst
Good morning, guys.
First question for you, Chuck.
As we look at the capacity utilization you ran out in the fourth quarter of 93.4%, and then full year, 97.5% -- that's pretty heady.
It means you are somewhat capacity constrained or getting close to it.
Just curious, as you think about that versus your pricing strategy, broadly, is there any reason that you would soften pricing or increase incentives?
It seems being capacity constrained, you might consider raising prices more broadly.
I understand there's some specific programs and inventory from here and there that you need to take some actions.
But you are in good position.
And the industry seems like you're in a good position on this capacity utilization.
I'm just curious, as you are thinking about 2013, shouldn't this be a good year for pricing?
Chuck Stevens - CFO, GM North America
Yes, let's talk about capacity first.
That 97% on a two-shift basis.
If we looked at our capacity on a three-shift basis, ultimately we'd like to be in the range of 120% to 130%.
So there's an opportunity to continue to drive that.
We've got eight plants on three shifts.
We'd like to increase that, so we continue to thin structural costs.
But, talking about pricing next year and where we are with the GMT900, obviously we want to transition through that and have a good position in the market, from a share standpoint, as we launch the K2 XX.
We don't want to give up market position from that standpoint.
So I think, when you look at carryover pricing year over year, the biggest headwind or challenge we'll have will be related to the GMT900.
I think, from the rest of the portfolio perspective, we're going to continue to opportunistically look at improved pricing.
John Murphy - Analyst
Okay.
That's very helpful.
And then, Dan, you mentioned you got an ABS deal off at $1 billion at 1.2% at GM Financial.
Obviously that's very inexpensive relative to what you are charging your customers.
Just curious, are we going to see a lot more deals like that for GM Financial?
Or will there be a day in the future where you are actually doing on-balance-sheet funding for GM Financial?
Dan Ammann - SVP and CFO
Well, those are on-balance-sheet securitizations, so they are reflected on the GMF balance sheet.
And that's been a primary funding tool for GMF over the last little while, because it is just such an efficient way to fund, number one.
Number two, it matches perfectly the duration of the assets and the liabilities, so you don't get into any sort of carry trade issues, if you like, there.
We have issued, over the last year and a half $1.5 billion of unsecured debt out of GMF at increasingly attractive rates, as well.
And so we are migrating to a broader set of funding tools for the business there, as we grow the portfolio.
The acquisition of Ally will further broaden out the sources of funding that we have for the business.
So it's a pretty deliberate and steady development of the funding base -- keeping it as efficiently as possible; well-matched from a liquidity point of view as possible; diversified sources of funding.
Pretty much the evolution that you would want to see as we continue to grow the business.
John Murphy - Analyst
Okay.
And then, lastly, on cash structure and how you are looking at that versus returning value to shareholders.
Obviously the pension, you were kind of capped as far as putting cash contributions likely in this year.
You are talking about the focusing on the mandatory convert and the VEBA as things that you might be focusing on next, as far as taking down.
Could there be more share buybacks or a dividend put in place before you get the mandatory and the VEBA preferreds out of the way?
Or do you think you need to focus on building up cash and taking those out before you would return more value to shareholders?
I recognize you already bought back shares, but I'm just curious, in order of operations, where cash will go there?
Dan Ammann - SVP and CFO
Well, I'd say a couple of things.
One, just a minor point, which is the mandatory convertible will convert to common stock in November, by its terms.
So that's not a cash call per se.
That's more a cash opportunity, because once that converts we won't be paying the coupon that we are paying on that currently.
That's the point on that one.
More generally, I'd say we have a pretty disciplined capital allocation framework that we've used over the last year-plus now, that we used to review opportunities with our Board of Directors.
And that we look at everything a relative basis in there.
And so it's -- what I identified earlier, were defined opportunities that we see out there, we're always evaluating relative attractiveness of one opportunity over the other.
Things come along that we don't expect, necessarily, or aren't planning for, such as the buyback that we executed in December.
That wasn't something that we foresaw as a defined opportunity too much ahead of time.
So I guess the point is, there are things out there that we know we'd like to do.
There are opportunities that aren't well-defined right now that could come along.
And we will evaluate those in a defined, disciplined, risk-adjusted return to our shareholders framework.
John Murphy - Analyst
That's very helpful.
Thank you very much.
Operator
Adam Jonas, Morgan Stanley.
Adam Jonas - Analyst
Thanks, everybody.
And, Dan, I like the Freudian slip on the Corvair there.
Could be an interesting Valentine's Day present.
Question on Europe.
Opel -- we understand you've done a great job reducing inventory at the Company level.
Can you give us an update of where you stand in terms of unit inventory at the dealer level?
Dan Ammann - SVP and CFO
Dealer level is a little higher.
And we're working that down through this quarter as well.
I'd say we're in better shape on the Company side than we are on the dealer side, but we're making some good progress on that as well.
When we think about inventory, we think about obviously the whole chain, if you like.
And we're focused on those both pieces of that.
Adam Jonas - Analyst
Okay.
And the question on your -- does your guidance, either in the US or Europe, incorporate in any way, 94 yen dollar or 125 yen euro?
Have you or do you expect to see any competitive pressure from the Japanese players as a result of this?
Dan Ammann - SVP and CFO
Well, like I said, the whole currency equation, it's much more multi-dimensional then just what the yen is going.
On the flip side, you've got the -- as I said earlier, the Korean won and strengthening, which goes in the other direction for those guys.
You also have, when the yen strengthens as much as it did, going back a few quarters, a huge rush to localization by some of the Japanese to get more localization here.
So it may not be a perfectly symmetrical unwind for them on the other side of that, as well.
When we set our plans for that year, we obviously have FX assumptions in there.
And I'd say as we move into the early part of the year, there was some tailwinds and some headwinds; too soon to call the overall impact for the year.
South America, for example -- Brazilian real has moved favorably for us there.
And we gave you the impact of the Venezuelan devaluation.
So it's only February, and there's been a lot of currency activity already.
We'll keep track.
Adam Jonas - Analyst
Appreciate that.
And, finally, you've been looking for a new Head of Global Marketing for about six or seven months.
We believe you are still interviewing candidates from outside the Company.
How's that going?
Is there still a unified Head of Global Marketing job to be filled?
Or are you moving back to Global Brand Heads instead, and so that it's no longer really relevant?
And in that vein, are we still on track for the $2 billion of savings from Commonwealth as a result of you potentially reconsidering your global marketing strategy?
Thanks.
Dan Akerson - Chairman and CEO
The answer to the question is it will probably evolved more to a Global Brand Head rather than a Global Chief Marketing Officer.
And, yes, the Commonwealth structure we've got in place -- which largely surrounds Chevrolet -- is still operative, still in place, and the savings are still projected.
Dan Ammann - SVP and CFO
Yes, no change there.
Adam Jonas - Analyst
Thank you.
Operator
Ryan Brinkman, JPMorgan.
Ryan Brinkman - Analyst
Hi, good morning.
Thanks for taking my call.
At the Detroit show, you guided to roughly flat GM Financial earnings year-over-year in 2013, inclusive of a partial year of profits from Ally's international operations.
I'm not sure what your assumptions are for when the various different portions of Allied International close, or what do you expect in terms of profit contribution from those operations.
So maybe you can help me understand what your underlying assumptions are for the current core North American GM Financial operations in 2013?
It would seem to incorporate a decent decline.
And I was hoping you could walk through some of the drivers there, given that they are coming off such a record year in 2012.
Dan Ammann - SVP and CFO
Well, sure.
I think the outlook that we provided stands, which is the core of the existing GMF will be down slightly, and offset by some portion of a partial year impact from the Ally business.
Exactly how that shakes out will be a function of when the transaction closes.
And it closes in a series of steps by geography.
So that's all still moving around somewhat.
What I would say is, on the core GMF business, is we have had some -- we had some tailwinds last year from some of the pre-acquisition portfolio, and how that was accounted for; and we've gone through that previously, that that gave some extra yield to some of those assets through the P&L.
So, a little bit of that tailwind, and that won't recur this year.
So there's no huge change in the fundamental outlook.
It's more just some of the ways that the accounting worked for some of the pre-acquisition portfolios rolling off.
And we're back to the core for the business.
So, I'd say that the -- assuming Ally transactions close roughly on time through the second and third quarters, that we would expect to be essentially, roughly flat year over year.
Ryan Brinkman - Analyst
Okay, great.
Thanks.
And then last question -- full-size pickup truck sales.
They've improved recently in the US.
And it looks like in your share also got quite a bit stronger in December and in January, relative to what it was in October and November.
So, can you discuss for us the sensitivity of your North American earnings to these pickup truck volumes?
And maybe walk us through how you are feeling now about the pickup truck market in the US; and your inventories, in light of how the market and your share has trended over the past couple of months.
Thank you.
Chuck Stevens - CFO, GM North America
Yes, I would say that, first, we need to recognize that our capacity in full-size pickups is relatively flat year-over-year.
We're going to have significant downtime and transition time.
So as the industry improves, as segment share increases, our share increases, there's not a lot of production upside.
What it does is help us reduce our inventory levels.
And from an inventory perspective, I would say, after December and January results, we are executing to our plan.
There's a lot of variability and volatility in that, but we are reasonably comfortable with our truck inventories, where they are now, as we head into the transition.
So I would say, from a 2013 perspective, there is pretty limited upside on full-size pickup production, just because of the transitions.
Ryan Brinkman - Analyst
Okay, great.
Thanks for all the color.
Congratulations on the quarter.
Operator
Thank you.
Mr. Arickx, I'm will now turn the call back to you.
Please continue with your presentation or closing remarks.
Randy Arickx - Executive Director of GM Communications and IR
Thank you, Operator.
Thanks, everyone, for your time today.
And we'll be talking to you soon.
Bye, now.
Operator
Thank you.
Ladies and gentlemen, that does conclude the conference call for today.
We thank you for your participation, and ask that you please disconnect your lines.
Thank you and have a good day.