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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.

2016 Chevy Volt will have more EV range, bigger battery

Meet the new Volt, not the same as the old Volt. That appears to be the story when General Motors introduces the 2016 Chevy Volt at the Detroit Auto Show in January. Today we're getting some more details on the guts of the new plug-in hybrid, and it turns out they're going to be much improved from the current Volt, which first went on sale at the end of 2010. Sure, the first-gen Volt did get some improvements along the way (a slightly larger battery pack, lane departure warnings) but the new Volt – which will go on sale in the second half of 2015 – marks the first time GM has been able to return to the drawing board and really make the improvements that its customers want. That's how Larry Nitz, GM's executive director of vehicle electrification explained it to AutoblogGreen today when explaining the all-new Voltec extended range electric vehicle (EREV) powertrain. "In the Gen 2 is we gave the engine a little more power, a little more torque, a little more displacement, more capability." – Larry Nitz Nitz said that the new Volt will be better in almost every sense: a bigger battery, longer EV-only range, 20 percent better acceleration in the low speed range and higher overall efficiency. This is due, in part, to the Volt's two motors being able to both act as generators and power the car. As we noted this morning, the 2016 Volt will use a larger, 1.5-liter four-cylinder engine, a version of which is already used in the Chinese-market Cruze. Nitz said that this has a number of benefits, including more power and quieter operation. "Some people would say, why did you make [the first-gen engine] so big. I would say, why did you make it so small?" he said. "It works good, our customers love it, but the reality is that if you go a little bit off and use the car a little harder, you can get the engine to need to operate at a higher speed. In an EV, that's quite noticeable. So, what we did in the Gen 2 is we gave the engine a little more power, a little more torque, a little more displacement, more capability and what it has marginally enabled is not only is it more efficient but it's also quieter." Nitz wouldn't talk about how the new powertrain might affect the two other products that use the Volt's underpinnings – the Cadillac ELR and the Opel Ampera – but if you've got a quieter option, we assume that's something ELR drivers would enjoy. But that's a story for another day.

GM recalling 135,000 SUVs with plastic jacks that can break

General Motors is recalling 135,400 compact crossovers because their emergency jack can break under load. The problem occurs when the jack — which is plastic — isn't positioned correctly as detailed in the owner's manual. This can cause the jack to fracture. If the jack breaks and the vehicle collapses, there's a risk of injury or death, according to an NHTSA recall alert. The recall involves the 2020-22 Buick Encore GX and 2021-22 Chevrolet Trailblazer. A GM test driver discovered the problem when he broke a jack during a durability test on a Trailblazer. GM started investigating in April and found 21 claims of jack failures, including one reported injury. "This jack design may not be sufficiently robust against fractures if improperly or incorrectly positioned on the vehicle frame by the user," a NHTSA safety report said. GM will start notifying vehicle owners July 26. It will provide free replacement jacks that are made of metal.   Featured Gallery 2021 Buick Encore GX View 21 Photos Recalls Buick Chevrolet GM