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How Chevy Silverado, GMC Sierra will take on the Ford F-150 profit machine

FORT WAYNE, Ind. — When General Motors engineers were developing the 2019 Chevrolet Silverado and GMC Sierra pickup trucks, some of them joined public tours of Ford's Dearborn, Mich., factory to watch aluminum-bodied F-Series trucks go down the assembly line. The redesign of the Ford F-Series trucks, launched in 2014, set a new standard for fuel economy and lightweight vehicle construction. But armed with stopwatches and trained eyes, the GM engineers believed they saw problems. "They had a real hard time getting those doors to fit," Tim Herrick, the executive chief engineer for GM truck programs, told Reuters. His team did more intelligence gathering. They bought and tore apart Ford F-Series doors sold as repair parts. Their conclusion: GM could cut weight in its trucks for a lower cost using doors made of a combination of aluminum and high-strength steel that could be thinner than standard steel, shaving off kilograms in the process. These pounds-and-pennies decisions will have major implications in the highest-stakes game going in Detroit: dominance in the world's most profitable vehicle market, the gasoline-fueled large pickup segment. What's more, GM is banking on strong sales of overhauled 2019 Silverados and GMC Sierras to fund its push into automated and electric vehicles — a business many investors see as the auto industry's long-term future. The risks are high given the hits automakers have taken from U.S. President Donald Trump's trade policies. Rising aluminum prices spurred by Trump's tariffs are driving up costs on the Ford's F-Series, while rising steel and aluminum prices likewise drag on GM results. GM also has a significant risk should the United States, Mexico and Canada fail to agree on a new NAFTA trade deal, given GM trucks built at its Silao, Mexico, factory could face a 25 percent tariff if NAFTA collapses. Major profit per truck Interviews with GM executives and a tour at its factory here in northwest Indiana provide a detailed look inside GM's plan for the most important vehicles in its global lineup. These big pickups are everything Tesla's Model 3 or Chevy's Bolt electric car is not. The mostly steel body is bolted to the truck's steel frame, rather than the one-piece body and frame electric vehicles. The majority of trucks will have a V-8 gasoline engine powering the rear wheels — like the classic GM cars of the 1950s. Some Silverados will have new four-cylinder engines, but there is no electric or hybrid offering as of now.

Chevy, GMC and Ram dealers are worried they'll run out of new pickups

One of the unexpected side effects of the ongoing coronavirus pandemic is a shortage of pickups at Chevrolet, GMC and Ram dealers. Supplies are running out, and the factories that build these trucks remain closed. Stores across the nation began increasing incentives in March, when the first stay-at-home orders were issued, in a bid to continue luring buyers into showrooms. They also launched online sales channels, or expanded their existing digital business. Sales nonetheless plummeted in April 2020, but in-demand vehicles, like the Ram 1500 and the Chevrolet Silverado, are still selling relatively well thanks in part to the aforementioned incentives. Pickups outsold sedans for the first time in April 2020, according to The Detroit News, by 17,000 units. The problem is that General Motors, Fiat Chrysler Automobiles (FCA), and Ford temporarily closed their factories in March. "The pipeline is very dry," said Mike Maroone, the CEO of a large dealership group named Maroone USA, in an interview with Automotive News. He told the publication his Chevrolet stores are sitting on a 30-day supply of the Silverado, which is one of America's best-selling vehicles. "That is a problem for us," he concluded. Coronavirus-related lockdowns and factory closures compound problems already faced by dealerships who represent General Motors-owned brands. They entered 2020 with a thinner inventory than a year earlier due to the 40-day United Auto Workers (UAW) strike that paralyzed the company late in 2019, and the 0%, 84-month offers announced in March have sapped supply. Ram wasn't affected by a strike, but it has relied heavily on generous incentives to move trucks off lots. Ford, on the other hand, limited incentives to 2019 models. Inventory levels differ greatly from region to region. The national average for the Silverado stood at an 82-day supply in March 2020, down from 120 in March 2019. Ram stores had a 114-day supply of the 1500 (compared to 134 a year earlier), while Ford bucked that trend with a 111-day supply versus 84 in 2019. Don't panic if you're in the market for a truck; we're not facing a complete drought. Automotive News added that America's light-duty pickup inventory could fall to 400,000 units by the end of May, and drop further to 260,000 units in June. For context, there were about 700,000 light-duty trucks in stock in May and June of 2019. That's unquestionably a sharp drop, but there will still be over a quarter of a million trucks to choose from.

GM CEO to meet with U.S. lawmakers over job cuts

WASHINGTON — General Motors Co Chief Executive Mary Barra plans to visit Capitol Hill next week to discuss the company's plans to halt production at five plants in North America next year and cut up to 15,000 jobs, two congressional aides said on Friday. GM has come under harsh criticism from lawmakers from both major political parties, and from President Donald Trump, since Monday when it announced the biggest restructuring for the U.S. No. 1 carmaker since its bankruptcy a decade ago. Barra is expected to meet with lawmakers from Michigan and Ohio, where GM plans to shutter three plants, as well as senior leaders in Congress. GM did not immediately comment. Barra has been calling lawmakers this week to explain the decision to end production. Trump has threatened to revoke subsidies for GM. The Detroit automaker plans to halt production next year at three assembly plants: the Lordstown small-car factory near Youngstown, Ohio; the Detroit-Hamtramck complex in Detroit; and the Oshawa, Ontario, assembly complex near Toronto. It will also stop building several models now assembled at those plants, including the Chevrolet Cruze, the Chevrolet Volt hybrid, the Cadillac CT6 and the Buick LaCrosse. Additionally, GM plans to shutter the Warren transmission plant outside Detroit and a plant that makes electric motors and drivetrains outside Baltimore, Maryland. The Cruze compact car will be discontinued in the U.S. market in 2019, although GM may continue building it in Mexico for other markets, Barra said. Reporting by David Shepardson. Related Video: