Chip shortage leaves GM with unfinished vehicles
The global shortage of computer chips and other parts forced General Motors to build 95,000 vehicles without certain components during the second quarter.
The Detroit automaker said in a regulatory filing Friday that most of the incomplete vehicles were built in June, and that it expects most of them to be finished and sold to dealers before the end of the year.
The unsold vehicles amounted to 16% of GM's total sales from April through June. The company said Friday that it sold more than 582,000 vehicles during the quarter, down more than 15% from a year ago.
The company reaffirmed its full-year net income guidance of $9.6 billion to $11.2 billion with pretax earnings of $13 billion to $15 billion. For the first time the company predicted that it would make $2.3 billion to $2.6 billion before taxes in the second quarter. That fell short of analyst estimates of $3.97 billion, according to FactSet.
The chip shortage has vexed automakers across the globe since 2020, forcing many automakers to temporarily close factories and trim production. The shortage has limited the supply of new vehicles on dealer lots in the U.S. to around 1 million, when in normal years it's about 4 million at any given time.
Biden opens Gulf for oil, gas leases
The Biden administration on Friday proposed up to 10 oil and gas lease sales in the Gulf of Mexico and one off the Alaska coast over the next five years, scaling back a Trump-era plan that called for dozens of offshore drilling opportunities, including in undeveloped areas.
Administration officials said fewer lease sales - or even no lease sales at all - could occur, with a final decision not due for months.
The Interior Department had suspended lease sales in late January because of climate concerns but was forced to resume them by a U.S. District Judge in Louisiana. The Biden administration cited conflicting court rulings about that decision when it canceled the last three lease sales of the previous offshore leasing cycle.
That prior five-year cycle, a program adopted under former President Barack Obama, expired on Thursday.
There will be a months-long gap before a new plan can be put in place. The oil industry says the delay could cause problems and potentially lead to decreased oil production if sales are significantly delayed.
But Friday's announcement is a disappointment to environmentalists who rallied around then-candidate Joe Biden when he promised to end new drilling in federal lands and waters.
Under the Trump administration, Interior officials had proposed 47 sales, including 12 in the Gulf of Mexico, 19 in Alaska and nine off the Atlantic coast that were later withdrawn. Trump lost the 2020 election before the proposal was finalized.
Russia seizes control of Shell's oil project
Russian President Vladimir Putin has handed full control over a major oil and natural gas project partly owned by Shell and two Japanese companies to a newly created Russian firm. It's a bold move amid spiraling tensions with the West over Moscow's military action in Ukraine.
Putin's decree late Thursday orders the creation of a new firm that would take over ownership of Sakhalin Energy Investment Co. It's nearly 50% controlled by British energy giant Shell and Japan-based Mitsui and Mitsubishi. Russia's Gazprom had a controlling stake in the Sakhalin-2 oil and gas project that accounts for about 4% of the world's liquefied natural gas market.
Japan, South Korea and China are the main customers for its exports.
EU prepares for cutoff of Russian oil and gas
The European Union's executive arm has pledged to draft an emergency plan aimed at helping member countries do without Russian energy in the wake of the Kremlin's war in Ukraine.
European Commission President Ursula von der Leyen says the initiative would build on EU moves to ditch Russian coal, oil and natural gas and would complement a bloc-wide push to accelerate the development of renewable energy such as wind and solar power. Von der Leyen spoke Friday in the Czech town of Litomysl, where she marked the start of the country's six-month stint as holder of the rotating EU presidency.
- Compiled by Dave Flessner