2019 Ram 2500 Tradesman on 2040-cars

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Huge, pricey trucks haul jobs and profits for the Detroit Three

DECATUR, Texas — Mickey McMaster is on his 12th pickup truck. The 61-year old farm equipment dealer in Decatur, Texas, two weeks ago treated himself to a 2019 GMC Denali for around $69,000 — a reward for long hours at work. "For me this is the Cadillac of trucks, it's a real luxury vehicle," McMaster said. "I've worked my way up to afford a truck like this and it shows that I've earned it." McMaster is the kind of customer General Motors Co is banking on as it plans to add 1,000 jobs at a plant in Flint, Michigan that will build a new generation of its largest pickups. Demand from Texas and other heartland states for big pick-ups is providing a lifeline to many workers the No. 1 U.S. automaker is laying off at plants elsewhere. The Detroit Three automakers and thousands of their U.S. workers are counting on customers like McMaster to keep buying bigger and more luxurious pickup trucks even if overall U.S. vehicle demand weakens this year, as most analysts predict. At Flint, GM will build a new generation of its heavy-duty Chevrolet Silverado and GMC Sierras, including luxury models that are some of the most profitable vehicles on the planet. GM, Ford Motor Co and Fiat Chrysler Automobiles NV's Ram division own the segment and are each doubling down with new or redesigned models launching this year. Sales of heavy-duty pickups in the United States have grown to more than 600,000 vehicles a year, up more than 20 percent since 2013, according to industry data. Prices for luxury models can easily top $70,000. GM on Tuesday celebrated the launch of a new generation of heavy-duty GMC and Chevrolet pickups at the assembly plant in Flint, Michigan, that is now building all such trucks for the company. At the same time that GM is laying off thousands of U.S. workers and planning to shutter five North American factories, Flint is hiring. The plant runs on three daily shifts, six days a week. As the new model's assembly system ramps up, the plant's capacity will increase by more than 25 percent, plant manager Mike Perez told Reuters. The Flint plant plans to add 1,000 workers, more than half of the 1,500 factory workers who have asked to transfer from plants GM has targeted for shutdown as part of CEO Mary Barra's restructuring plan. "We're bringing in 50 to 100 people every week," said Perez. Workers last week were still finishing the job of retooling the Flint factory to build the new heavy-duty trucks as part of a $1.5 billion investment project.

Stellantis won't race to split electric vehicles from fossil fuel cars

MILAN - Stellantis is not considering splitting its electric vehicle (EV) business from its legacy combustion engine operation, its finance chief said on Thursday, as the carmaker presented above-expectation revenue data for the first quarter. Chief Financial Officer Richard Palmer told analysts he did not see huge benefits in the kind of separations pursued by rivals such as France's Renault and U.S. Ford. "We need to manage the company and the assets we have through this transition," he said. "There are benefits to having the cash flow being generated by the internal combustion business for the investments we need to make." Palmer said the group, formed by a merger last year of Fiat Chrysler and Peugeot maker PSA, was not averse to considering adjusting its structure "but we aren't anticipating any big changes." Palmer's comments came after the world's fourth largest carmaker said its net revenue rose 12% to 41.5 billion euros ($44.1 billion) in the January-March period, as strong pricing and the type of vehicles sold helped offset the impact of the semiconductor shortage on volumes. That topped analyst expectations of 36.9 billion euros, according to a Reuters poll. Milan-listed shares were up 0.5% by 1415 GMT, in line with Italy's blue-chip index. The impact of the chip crunch was evident in the decline in shipment figures which fell 12% in the quarter to 1.374 million vehicles. It was a similar story for Germany's BMW which posted higher revenues on Thursday and a decline in car sales. Riding the Recovery Stellantis, whose brands also include Citroen, Jeep and Maserati, confirmed its 2022 forecasts for a double-digit adjusted operating income margin, after 11.8% last year, and a positive cash-flow despite supply and inflationary headwinds. Morgan Stanley analysts said after the results that Stellantis had better management than many peers and benefited from its significant exposure to a stronger U.S. economy and a European recovery from the COVID-19 pandemic. They also said it was less affected by a slowing Chinese economy. Palmer said it was important for the group to maintain double-digit margins and keep delivering positive cash flows. "A 12% increase in revenue with a 12% decrease in volumes indicates a very strong performance on price and mix, which augurs well for our margin performance," he said. He said semiconductor supply problems were expected to ease this year with continued improvements in 2023.

Stellantis lays off salaried workers, cites uncertainty in EV transition

DETROIT — Jeep maker Stellantis is laying off about 400 white-collar workers in the U.S. as it deals with the transition from combustion engines to electric vehicles. The company formed in the 2021 merger between PSA Peugeot and Fiat Chrysler said the workers are mainly in engineering, technology and software at the headquarters and technical center in Auburn Hills, Michigan, north of Detroit. Affected workers were notified starting Friday morning. “As the auto industry continues to face unprecedented uncertainties and heightened competitive pressures around the world, Stellantis continues to make the appropriate structural decisions across the enterprise to improve efficiency and optimize our cost structure,” the company said in a prepared statement Friday. The cuts, effective March 31, amount to about 2% of Stellantis' U.S. workforce in engineering, technology and software, the statement said. Workers will get a separation package and transition help, the company said. “While we understand this is difficult news, these actions will better align resources while preserving the critical skills needed to protect our competitive advantage as we remain laser focused on implementing our EV product offensive,” the statement said. CEO Carlos Tavares repeatedly has said that electric vehicles cost 40% more to make than those that run on gasoline, and that the company will have to cut costs to make EVs affordable for the middle class. He has said the company is continually looking for ways to be more efficient. U.S. electric vehicle sales grew 47% last year to a record 1.19 million as EV market share rose from 5.8% in 2022 to 7.6%. But sales growth slowed toward the end of the year. In December, they rose 34%. Stellantis plans to launch 18 new electric vehicles this year, eight of those in North America, increasing its global EV offerings by 60%. But Tavares told reporters during earnings calls last month that “the job is not done” until prices on electric vehicles come down to the level of combustion engines — something that Chinese manufacturers are already able to achieve through lower labor costs. “The Chinese offensive is possibly the biggest risk that companies like Tesla and ourselves are facing right now,Â’Â’ Tavares told reporters. “We have to work very, very hard to make sure that we bring out consumers better offerings than the Chinese.