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GM profit dips on truck changeover, but beats estimates

DETROIT — General Motors on Thursday reported a higher-than-expected quarterly profit despite a drop in production of high-margin pickup trucks, as it gears up for new models that are expected to boost profits next year. Like rivals Ford and Fiat Chrysler Automobiles, GM is banking on highly-profitable Chevy Silverado and GMC Sierra pickup trucks to lift profits, as consumers shift away from traditional passenger cars in favor of these larger, more comfortable trucks, SUVs and crossovers. During the first quarter, the process of changing over to GM's new pickups resulted in a drop in production of 47,000 units. GM Chief Financial Officer Chuck Stevens said the production drop had resulted in a drop in pre-tax profit of up to $800 million. Earlier this year, GM said its 2018 profits would be flat compared with 2017, but expected its all-new pickup trucks would boost margins starting in 2019. On Thursday, GM reiterated its full-year 2018 forecast for adjusted earnings in a range from $6.30 to $6.60 per share. The automaker said capital expenditures were more than $500 million higher in the quarter because of investments its new pickup trucks and a family of low-cost vehicles under development with Chinese partner SAIC Motor Corp. On Wednesday, rival Ford said it would stop investing in most traditional passenger sedans in North America. CFO Stevens told reporters on Thursday that GM has "already indicated that we will make significantly lower investments on a go-forward basis" in sedans. 2019 GMC Sierra View 21 Photos GM benefited from a lower effective tax rate in the quarter, but adjusted pre-tax margin fell to 7.2 percent from 9.5 percent a year earlier. Stevens said the company's profit margin should hit 10 percent or higher in the second quarter and for the full year. GM said material costs were $700 million higher in the first quarter, and it expects those costs to continue rising. The automaker said it would counter those increases with cost cutting measures. "It is a more difficult environment than it was three or four months ago," Stevens said when asked about rising commodity prices from potential steel and aluminum tariffs announced by the Trump administration. "But we are confident we can continue to offset that." The company reported quarterly net income of $1.05 billion or $1.43 per share, a drop of nearly 60 percent from $2.61 billion or $1.75 per share a year earlier. Analysts had on average expected earnings per share of $1.24.

2024 Chevrolet Silverado EV output jumps to 754 hp and 785 lb-ft

A couple of days ago, GMC unleashed its 2024 Sierra EV Denali Edition 1 pickup, the luxury truck division's version of the 2024 Chevrolet Silverado EV. As has been the case between Chevy and GMC for decades, GMC designers worked to put ample visual difference between the two pickups that share the similar underpinnings. Unlike what's been the historical case, GMC announced output figures for the Sierra EV well above those for the Silverado. Preliminary estimates for the battery-electric Sierra with the dual-motor powertrain are 754 horsepower and 785 pound-feet of torque. Chevy revealed the 2024 Silverado EV in January with 664 hp and 785 lb-ft in RST trim. We're not sure what happened after the GMC debut, but the Bowtie has updated the Silverado's output to match the GMC with 754 hp and 785 lb-ft. Chevy truck communications spokesperson Sean Szymkowski submitted a statement to various outlets explaining, "As we prepare for production of the Silverado EV, our engineering team has further refined the estimated performance specs for the 2024 Chevrolet Silverado EV RST First Edition. GM now estimates horsepower to be up to 754 and torque up to an estimated 785 lb-ft when Wide Open Watts mode is engaged." It's possible Chevrolet did so in order to forestall backlash about the disparity, or it's possible the automaker already planned to do so after the GMC dropped. On the ICE side, buyers have got used to powertrain parity, the Silverado and Sierra offering the same engines with the same outputs even with pricing about $3,600 apart on the respective top trims. No matter how the decision was made, the benefits redound to Silverado EV buyers. By the way, the "Wide Open Watts" reference refers to the driving mode required to extract these peak power figures. In the GMC Sierra EV, this is called Max Power Mode. We're still looking for clarity on the output figures in everyday driving modes, we believe those will be the same 510 hp and 615 lb-ft that's the maximum in the lower trim Silverado EV Work Truck.    With a year to wait before the Silverado RST EV reaches reservation holders, and with the Chevrolet Work Truck providing real-world feedback before the RST arrives, don't be surprised at more tweaks made to both the Silverado and Sierra EVs before they hit the market. Related video: GMC reveals the all-electric 2024 Sierra EV

GM delays truck plant shift so workers can watch Detroit Lions NFC Championship game

It would be difficult to overstate just how big of a deal it is for the city of Detroit and its residents (and residents of southeast Michigan in general) that the Detroit Lions not only made it convincingly into the NFL playoffs but found significant success in defeating the Los Angeles Rams in the Wildcard round and then the Tampa Bay Buccaneers the following week. But if there's one thing we can point to as an automotive-minded group, it's this: General Motors has delayed the start of the third shift at its Flint Assembly plant so that workers won't have to miss any part of the game. To emphasize the magnitude of this decision, it's important to note that the Chevrolet Silverado HD and GMC Sierra HD are built at the plant, and the popularity and, perhaps more importantly, profitability of those heavy duty trucks is so high that it's the only GM plant in Michigan that runs a third shift, as pointed out by the Detroit Free Press. The delay is roughly an hour in total, and workers won't be paid for that missing time. We doubt there will be any complaints. Granted, this isn't the first time GM has delayed starting a late shift due to a big sporting event. In prior years, delays have been recorded for some Super Bowls and for the in-state Michigan vs. Michigan State rivalry game at GM facilities in Lansing, Michigan. Still, GM's statement on why it would hold off production of such a lucrative pair of vehicles explains it better than we can: "We recognize the Detroit Lions playing in the NFC Championship game as a rare, unique opportunity that warrants this temporary schedule adjustment to allow employees to enjoy the game and make it to work on time." It's not GM's only show of Lions pride. Take a close look at the General Motors logo currently being displayed at the Renaissance Center, GM's headquarters in Detroit. General Motors is displaying its Motor City pride with a subtle logo redesign to honor the Detroit Lions as they continues their Super Bowl hunt. Read more: https://t.co/Jmc6bmMK6n pic.twitter.com/9bJJqOmwxB — Ad Age (@adage) January 23, 2024 The Free Press reached out to Ford and Stellantis to see if either of GM's rivals would be making shift adjustments as well. Ford has yet to provide a comment, but Stellantis, makers of the Ram truck and Jeep SUVs, has confirmed it will be running normal schedules at all of its facilities. For now, there's only one more question that needs answering: What if the game goes to overtime?