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GM sees 'strong year' in 2018, then gold in Chevy Silverado for 2019

DETROIT — General Motors said on Tuesday it expects earnings in 2018 to be largely flat compared with 2017, but that profits should pick up pace in 2019 as its revamped line of high-margin pickup trucks hits the U.S. market. The 2018 earnings outlook was above market expectations, sending GM shares up more than 3 percent in premarket trading. "GM had a very good 2017 as we continued to transform our company to be more focused, resilient and profitable," GM Chief Executive Mary Barra said in a statement. "We are positioned for another strong year in 2018 and an even better one in 2019." GM and its Detroit rivals, Ford and Fiat Chrysler Automobiles, are bringing on new trucks at a time when overall U.S. new vehicle sales have been falling, but truck sales continue to grow as consumers abandon passenger cars in favor of pickups, SUVs and crossovers. GM on Saturday fired a new round in the battle for profits from one of the U.S. auto industry's most lucrative segments when it showed a new generation of its Chevrolet Silverado pickup truck at the Detroit auto show. The new Silverado, a highlight of the event, is the successor to GM's best-selling vehicle in North America. Sales of the current Silverado rose nearly 2 percent to 585,000 vehicles in 2017. In the coming months, the company will also reveal a revamped GMC Sierra pickup truck. U.S. new vehicle sales fell 2 percent in 2017 after hitting a record high in 2016, and are expected to drop further in 2018 as interest rates rise and more late-model used cars return to dealer lots to compete with new ones. GM said on Tuesday that while it retools a factory in Ft. Wayne, Indiana, to make the new pickup trucks, it will shift some production to an Oshawa, Ontario, plant in order to avoid missing sales in a hot market for the vehicles. The No. 1 U.S. automaker said it will record a $7 billion non-cash charge for its fourth-quarter 2017 earnings related to deferred tax assets. GM said it expects capital expenditure in 2018 of around $8.5 billion, about $1 billion of which will go toward funding self-driving car technology. Last week, the company said it is seeking U.S. government approval for a fully autonomous car — one without a steering wheel, brake pedal or accelerator pedal — to enter the automaker's first commercial ride-sharing fleet in 2019. GM said it expects 2017 earnings per share at the high end of its previously forecast range of $6 to $6.50.

Johan de Nysschen tells his side of the story

Automobile snagged time with ex-Cadillac, Infiniti, and Volkswagen of America boss Johan de Nysschen. General Motors decided to part ways with de Nysschen on April 18, 2018, after the German spent four years in charge of America's luxury brand. The longtime auto exec is a polarizing figure for enthusiasts, who seem to take a mostly negative view of his work at Infiniti and Cadillac. However, there's no denying de Nysschen is frank, and in the Automobile interview he puts an insider's perspective on a big bag of issues we can only speculate on. One of the biggest bombshells in the interview was that it wasn't de Nysschen's idea to move Cadillac to New York: "When I was recruited, I was informed that the company would relocate to New York," he said. Previous GM CEO Dan Ackerson had made the decision before hiring de Nysschen, then Ackerson let his new hire make the announcement. The big change came only two years after de Nysschen had taken over Infiniti after insisting Nissan's luxury brand move to Hong Kong. De Nysschen explained Cadillac's NYC move with the same rationale as Infiniti's Hong Kong move, so everyone assumed the new guy was doing his usual. He explains in the interview that after the move, "Folks who rooted for Detroit felt betrayed. Cadillac had an enemy." And that became a problem. He has nothing bad to say about GM or Cadillac, believing on the contrary that "GM is in a good position going forward." But he brought clarity to some of Cadillac's struggles. Among the issues was GM's "very vigorous" post-bankruptcy test for green-lighting a project. Another was the lack of specialization for the luxury arm. "Engines were generically developed with the Chevy brand in mind," he said, "and, then, 'Okay, well, yeah, it's good enough for Cadillac.'" That carried over into haphazard technology rollouts. "GM didn't have a specific technology roadmap aligned to particular brands," he said. "The process was, as they were developing new technologies, they would look at what product's launch date would be aligned with the maturation date and market readiness of a technology and go with it, whether Buick, Chevy, or what have you." De Nysschen worked to end such generalized approaches, which is how we get Cadillac taking the GM lead on technology and electrification.

GM Recalling Another 2.7 Million Vehicles In Five Separate Campaigns

The recalls keep rolling in from General Motors, evidently keen to avoid repeating the mistakes of the ignition-switch debacle and clean house. This time they're all coming at once, with five separate recalls announced together covering approximately 2.7 million vehicles. The largest of the five actions involves over 2.4 million units of the previous-generation Chevrolet Malibu and Malibu Maxx, Pontiac G6 and Saturn Aura in order to fix brake light wiring harness, which have been found to be susceptible to corrosion. The recall is separate from the 56k Aura sedans which GM recently recalled over faulty shift cables, not to mention the previous massive recall of 1.3 million vehicles – some of them the same models – but appears to have resulted from the National Highway Traffic Safety Administration investigation that started with the G6 almost a year ago. The second-largest campaign involves the 2014 Chevy Malibu, specifically those fitted with GM's 2.5-liter engine and stop/start system, approximately 140,000 examples of which has been found to have problematic brakes. The issue does not appear to be connected to the recall of 8k Malibu and Buick LaCrosse sedans (also involving brake woes) which we reported upon last week. Four crashes have been reported in such models, but GM admits it's not yet clear if the problem was a contributing factor in the accidents. A further 112k Corvette models from the 2005-2007 model years are being called in for problems with their low-beam headlamps resulting from a flexing relay control circuit wire that's not meant to bend. GM says it is "aware of several hundred complaints" about this issue, but notes that there have been no reports of related accidents. In addition, over 19k examples of Cadillac CTS from the 2013 and 2014 model years are being recalled over windshield wipers that might not work after a jump start. Finally, GM is also bringing in 477 examples of its 2014 Chevy Silverado, Tahoe and GMC Sierra (though not the Yukon) to fix a problem with a tie rod in its steering rack. As ever, all recall repairs will be performed free of charge, and GM is now estimating that recall-related actions this quarter will result in an estimated $200-million charge against its second-quarter earnings. Read the full announcement from GM below for further details.