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GM earnings rise 1% as buyers pay more for popular pickups

DETROIT — General Motors said Thursday that higher prices for popular pickup trucks and SUVs helped overcome slowing global sales and profit rose by 1% in the second quarter. The Detroit automaker said it made $2.42 billion, or $1.66 per share, from April through June. Adjusting for restructuring costs, GM made $1.64 per share, blowing by analyst estimates of $1.44. Quarterly revenue fell 2% to $36.06 billion, but still beat estimates. Analysts polled by FactSet expected $35.97 billion. Global sales fell 6% to 1.94 million vehicles led by declines in North America and Asia Pacific, Middle East and Africa. The company says sales in China were weak, and it expects that to continue through the year. In the United States, customers paid an average of $41,461 for a GM vehicle during the quarter, an increase of 2.2%, as buyers went for loaded-out pickups and SUVs, according to the Edmunds.com auto pricing site. The U.S. is GM's most profitable market. Chief Financial Officer Dhivya Suryadevara said she expects the strong pricing to continue, especially as GM rolls out a diesel pickup and new heavy-duty trucks in the second half of the year. "We think the fundamentals do remain strong, especially in the truck market," she said, adding that strength in the overall economy and aging trucks now on the road should help keep the trend going. Light trucks accounted for 83.1% of GM's sales in the quarter, and pickup truck sales rose 8.5% as GM transitioned to new models of the Chevrolet Silverado and GMC Sierra, according to Edmunds, which provides content to The Associated Press. As usual, GM made most of its money in North America, reporting $3 billion in pretax earnings. International operations including China broke even, while the company spent $300 million on its GM Cruise automated vehicle unit. Its financial arm made $500 million in pretax income. Suryadevara said GM saw $700 million in savings during the quarter from restructuring actions announced late last year that included cutting about 8,000 white-collar workers through layoffs, buyouts and early retirements. The company also announced plans to close five North American factories, shedding another 6,000 jobs. About 3,000 factory workers in the U.S. whose jobs were eliminated at four plants will be placed at other factories, but they could have to relocate. GM expects the restructuring to generate $2 billion to $2.5 billion in annual cost savings by the end of this year.

Cadillac Super Cruise needs subscription after free trial period

Not long ago, Motor Trend broke the news that Cadillac's Super Cruise is only free for the first three years, after which the Level 2 autonomy system moves to subscription pricing. MT's report came on the eve of 2018-model-year Cadillac CT6 buyers being asked whether they wished to retain access to their Super Cruise. A few days after that report, Cadillac said it would give those first-year buyers of the technology — "the helpful adopters" — another free year, so they'll need to make a decision in August 2021 along with the 2019MY CT6 buyers. After a bit of digging by other outlets, it seems Motor Trend broke the Super Cruise news primarily to members of the media (including us); the details in the report have been communicated to customers in fine print in at least two places. First, let's clarify that the subscription is for OnStar, not Super Cruise only. Cadillac has made clear since the beginning that the tech needs an active OnStar plan, a Wi-Fi Hotspot, a working electrical system, cell reception, and a GPS signal to work. Knowing that, and knowing OnStar is only free for one month on new vehicles — GM shortened the free trial last year from three or six months — before requiring a subscription, might have encouraged someone to ask the question before now (we didn't...). In response to Jonathan Gitlin at Ars Technica asking Twitter about who knew, Bozi Tatarevic responded, "It might not have been released in the press materials but I remember reading about it in the order guide documents for the CT6 and noting that it was tied to OnStar and would eventually require a plan that started at like $25 per month." And Tatarevic pointed to this snippet in The Philadelphia Inquirer review of the CT6 from 2018: "The Super Cruise feature is part of OnStar and is free for three years. OnStar advertises subscriptions from $24.99 to $59.99 a month." If Super Cruise is only free as long as OnStar is free, then new car buyers now will get the tech for one month. Owners who cancel OnStar or choose a plan that doesn't include Super Cruise will still benefit from adaptive cruise control and lane-centering.   The automaker hasn't said what Super Cruise pricing will be, but the OnStar site apparently reveals the answer. There are six plans listed on the Compare Plans page, but two are combinations of other plans.

Opel pulls out of Russia, GM to focus on Cadillac, 'iconic' Chevys

General Motors is going to realign its priorities in the struggling Russian marketplace, withdrawing its Opel brand and pulling out mainstream Chevrolet models. Instead, the General will take aim at Russia's well-established oligarchy, pushing Cadillac as well as "iconic" Chevrolet models, like the Corvette, Camaro and Tahoe. "This change in our business model in Russia is part of our global strategy to ensure long-term sustainability in markets where we operate," GM president Dan Ammann said in a statement. "This decision avoids significant investment into a market that has very challenging long-term prospects." Russian customers interested in an Opel or mainstream Chevys like the Spark, Aveo (the US market Sonic), Cobalt (shown above), Cruze, Orlando and the like have until December to snap up a car before the brands are pulled. "We do not have the appropriate localization level for important vehicles built in Russia and the market environment does not justify a major investment to further localize." Opel Group CEO Karl-Thomas Neumann said. GM will continue to offer service to customers in Russia. "We can assure our customers that we will continue to provide warranty, parts and services for their Chevrolet and Opel vehicles," Neumann said. Beyond realigning its brands in Russia, GM also announced that it would also be idling the company's factory in the country's second-largest city, St. Petersburg. This is the second time the St. Petersburg factory has been in the news – GM announced that it'd be idled for roughly two months back in February. Scroll down for the official press release from GM. GM to Change Business Model in Russia 2015-03-18 Focus on Cadillac and iconic Chevrolet vehicles Wind down Opel brand and sale of mainstream Chevrolet cars Idle GM Auto manufacturing facility in St. Petersburg Part of GM's strategy to ensure long-term sustainability in global markets DETROIT – General Motors today announced plans to change its business model in Russia. GM will focus on the premium segment of the Russian market with Cadillac and U.S.-built iconic Chevrolet products such as the Corvette, Camaro and Tahoe. The Chevrolet brand will minimize its presence in Russia and the Opel brand will leave the market by December 2015. "This change in our business model in Russia is part of our global strategy to ensure long-term sustainability in markets where we operate," said GM President Dan Ammann.