BREAKINGVIEWS-GM and Ford truck past economic road blocks

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Jennifer Saba

NEW YORK, July 28 (Reuters Breakingviews) - The latest earnings from Detroit automakers make one thing clear: nothing can come between Americans and their trucks. For years, General Motors GM.N and Ford Motor F.N have managed to keep selling expensive gas-guzzlers, all the while dodging tariffs, sour consumer sentiment and rising fuel costs. The growing number of obstacles, though, raises the risks of a spin-out.

Ford has had a particularly rough ride of late, still grappling with the consequences of a fire at crucial aluminum supplier Novelis. On Tuesday, it reported that overall revenue fell 4% year-over-year to $48.3 billion. Nonetheless, the maker of the quintessentially American F-150 truck managed to increase its operating profit by $400 million, thanks partly to continued pricing power. Combined with lower costs, boss Jim Farley announced that the company now expects up to $11 billion of such profit for the full year, up from $10.5 billion previously.

Cross-town rival GM is on a similar track, last week reporting strong second-quarter operating profit, lifted $700 million year-over-year by pricing. The company led by Mary Barra increased its profit forecast for 2026 as well, up to $16 billion from a high of $15.5 billion. Together, GM and Ford could reap $27 billion if they hit the top end of the range, rising by more than a third from last year.

Consumer appetite for big honking vehicles has not been sated, despite sticker shock on the lot and at the pump. Ford financial chief Sherry House noted that F-Series pickup trucks outsold their closest competitor by more than 80,000 units in the first half of the year.

The looming question for years now has been when consumers will finally retrench. After a massive rise in 2021, industry-wide new vehicle prices have since plateaued near to $50,000, Cox Automotive reckons. Combined with rising interest rates, the average monthly repayment for a loan on a new car has reached $770, according to Experian data for the first quarter up from $748 in early 2025. Fuel costs are up, with the American Automobile Association saying that the national average has jumped 15 cents from mid-July to $4.09 per gallon.

Then there’s the Trump administration’s new round of tariffs on Canada, a major trading and production partner for automakers, announced earlier this month. Meanwhile, electric vehicles is generating mostly red ink: Ford lost nearly $1 billion on battery-powered rides in the quarter, while GM said it is “making progress in right-sizing its EV capacity.” Consumer confidence dropped in July as inflation persists. Eventually, someone will have to tap the brakes.

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CONTEXT NEWS

Ford Motor reported on July 28 that second-quarter 2026 revenue fell 4% year-over-year to $48.3 billion. Adjusted operating profit increased 19% to $2.5 billion. The company raised the range for its full-year expectations for such profit to up to $11 billion to up to $10.5 billion.

Rival General Motors reported on July 21 that operating profit rose 30% year-over-year to $3.9 billion, partly as a result of price increases.

(Editing by Jonathan Guilford; Production by Pranav Kiran)

((For previous columns by the author, Reuters customers can click on SABA/jennifer.saba@thomsonreuters.com))