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Chevy, Lincoln dealers say they still want sedans

Detroit automakers have famously turned their backs on sedans as they make the strategic bet to double down on money-making trucks and SUVs, but dealers for at least two American brands are giving the companies contrary signals. In separate recent interviews with leading national dealer councils for Chevrolet and Lincoln, Automotive News reports that both brands’ dealers still see a need for cars. The publication published a Q&A interview with Mike Bowsher, chairman of the Chevrolet National Dealer Council, who said Chevy dealers managed to hold onto market share last year despite the phase-out of the Cruze compact sedan and hatchback, thanks to products like the Spark and Sonic subcompacts and the Trax and Equinox crossovers. But, he acknowledged, “We do feel like we could use a car, especially in the low-MSRP range.” The comments follow similar recent comments from Tom Lynch, who chairs the Lincoln National Dealer Council. He told AN, “If weÂ’re not in segments where there is still a good amount of business, I think the company and the dealers lose out.” The Cruze was one of the victims of GMÂ’s November 2018 announcement of plant closures, with production having ceased with the closure of GMÂ’s Lordstown, Ohio assembly plant last year. GM sold 47,975 Cruzes in 2019 but a healthy 142,617 in 2018. At Lincoln, Lynch said the council has been telling the company it needs to stick with the sedan segment, despite plans to kill the MKZ sedan in the coming months and unconfirmed reports that the Continental isnÂ’t long for this world, either, despite the buzz of the suicide-door Coach Door Edition, shown in the photo above. Lincoln sold 17,725 MKZs and 6,586 Continental sedans in 2019, down a combined 15%, but still good for almost 22% of overall Lincoln sales. It's worth noting that Lincoln competes in a luxury segment that still expresses allegiance to four- and two-door cars. Even Cadillac, its cross-town rival, is staying active with the upcoming CT5 and CT4 sedans. Lynch pointed to Tesla as evidence that strong sedan products can resonate with consumers, though he conceded that “What that looks like for Lincoln going forward, IÂ’m not sure of.” For now, anyway, Chevy still offers the Sonic and Spark subcompacts, the latter of which saw sales climb 32.5% in 2019 to 31,281 (Sonic sales fell nearly as steeply).

GM laying off more than 4,000 workers Monday morning

According to reports from Automotive News, The Detroit News, and CNN, General Motors plans to begin laying off more than 4,000 salaried workers starting Monday morning. In a statement to AN, a spokesperson for the automaker said, "We are not confirming timing. Our employees are our priority. We will communicate with them first." We've been expecting layoffs at General Motors since November, 2018. At the time, the Detroit-based automaker announced it would seek to shed 8,100 salaried employees, shut down five assembly plants in North America, and kill off several slow-selling models. One month earlier, GM offered buyout packages to 18,000 workers and said it would seek to cut its global workforce by 25 percent. A spokesperson said at the time the moves were "proactive steps to get ahead of the curve by accelerating our efforts to address overall business performance." The cost-cutting moves are expected to save GM up to $2.5 billion in 2019 and as much as $6 billion by 2020. David Kudla, CEO and chief investment strategist of Mainstay Capital Management, referred to the impending culling as "Black Monday" and told The Detroit News that the layoffs would begin around 7:30 a.m. and continue in waves throughout the coming days and weeks. GM plans to deliver on its fourth-quarter and full-year 2018 earnings report on Wednesday. President Donald Trump plans to deliver the annual State of the Union address a day earlier on Tuesday. We expect to hear plenty more from both sides over the next several days.

GM says EVs are the future — but trucks are going to take it there

In the PowerPoint deck for the General Motors Capital Markets Day presentation, one of the more disturbing things comes early on, during GM President Mark Reuss' initial remarks, in an area where he is discussing the company's overall strength in trucks. The point being made is that GM has a truck for all and sundry. And there it is, a phrase on a slide that should send chills up the spines of those who still pine for the old Bob Seger "Like a Rock" Silverado ads: "Little bit country. Little bit rock 'n' roll." That's right. Donny and Marie. Somehow the Denis Leary snark in the F-150 ads is all the more appealing. The Capital Markets Day presentation was chock full of observations about electrification and automation (Reuss and CEO Mary Barra both noted that the corporation's vision is one of "Zero Crashes. Zero Emissions. Zero Congestion." Dan Ammann talked about the progress being made at Cruise Automation; Reuss rolled out the plan for an array of electrified vehicles, with a luxury EV and a compact SUV being the "Centroid Entries" for the modular bases of many others). But it is worth noting that there is no getting away from the power of pickups in the U.S. market, as that was the central topic in Chief Financial Officer Dhivya Suryadevara's comments, with "Truck Franchise" being flanked by "Key Financial Priorities" and "Financial Outlook." Clearly, to gloss the old phrase, the truck segment is where the money is. Suryadevra enumerated how the truck segment is significantly different than other types of light vehicles. Among her points: GM, Ford and FCA have more than 90% of market share. The truck parc has been growing and aging over the past 10 years. Customers are fiercely loyal to the segment—as in 70% of truck buyers are truck buyers. A good number of the vehicles are for commercial use (40 percent). Trucks are "less prone to. . .mobility disruption." Trucks offer high margins. Translaton: The segment is one that they're solidly positioned in. There are lots of old trucks on the road that will need to be replaced by new ones. Perhaps buyers may switch from a Sierra to a Canyon, but it will be a truck. If your livelihood depends on that type of vehicle, even if gas prices go up or the economy begins to go south, you're going to stick with it. Most of the country isn't San Francisco, so trucks will continue to be essential. And, well, they're profitable in the extreme.