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GM earnings rise 1% as buyers pay more for popular pickups

DETROIT — General Motors said Thursday that higher prices for popular pickup trucks and SUVs helped overcome slowing global sales and profit rose by 1% in the second quarter. The Detroit automaker said it made $2.42 billion, or $1.66 per share, from April through June. Adjusting for restructuring costs, GM made $1.64 per share, blowing by analyst estimates of $1.44. Quarterly revenue fell 2% to $36.06 billion, but still beat estimates. Analysts polled by FactSet expected $35.97 billion. Global sales fell 6% to 1.94 million vehicles led by declines in North America and Asia Pacific, Middle East and Africa. The company says sales in China were weak, and it expects that to continue through the year. In the United States, customers paid an average of $41,461 for a GM vehicle during the quarter, an increase of 2.2%, as buyers went for loaded-out pickups and SUVs, according to the Edmunds.com auto pricing site. The U.S. is GM's most profitable market. Chief Financial Officer Dhivya Suryadevara said she expects the strong pricing to continue, especially as GM rolls out a diesel pickup and new heavy-duty trucks in the second half of the year. "We think the fundamentals do remain strong, especially in the truck market," she said, adding that strength in the overall economy and aging trucks now on the road should help keep the trend going. Light trucks accounted for 83.1% of GM's sales in the quarter, and pickup truck sales rose 8.5% as GM transitioned to new models of the Chevrolet Silverado and GMC Sierra, according to Edmunds, which provides content to The Associated Press. As usual, GM made most of its money in North America, reporting $3 billion in pretax earnings. International operations including China broke even, while the company spent $300 million on its GM Cruise automated vehicle unit. Its financial arm made $500 million in pretax income. Suryadevara said GM saw $700 million in savings during the quarter from restructuring actions announced late last year that included cutting about 8,000 white-collar workers through layoffs, buyouts and early retirements. The company also announced plans to close five North American factories, shedding another 6,000 jobs. About 3,000 factory workers in the U.S. whose jobs were eliminated at four plants will be placed at other factories, but they could have to relocate. GM expects the restructuring to generate $2 billion to $2.5 billion in annual cost savings by the end of this year.

A few signs that Cadillac's revival is taking hold

Only a flatworm would not have predicted the Cadillac ATS would help increase sales for America's erstwhile luxury brand of record; however, even the best automotive oracles didn't realize by how much: The ATS fueled a 49-percent increase of the brand's year-on-year sales in March, the sixth straight month of growth for Cadillac. The momentum helped push General Motors to post a 6.4-increase in sales in March versus 2012, leading its domestic competitors.
Dealership salesmen are among the first to register the shift occurring at Cadillac. A Texas dealer related an incident in which he helped a mother affix a baby seat in a car for a test drive, explaining that as opposed to the older buyers that are still a Cadillac mainstay he's getting "a pretty diverse group that's coming through the door now" who are "younger and better educated." Aided by incentives on the ATS, Cadillac's sales are up 38 percent so far this year, overtaking Acura as the fourth best selling luxury brand, and GM stock is benefiting with incremental gains because of it. Based on early response, the new 2014 Cadillac CTS should keep things going in the same direction.
The trend at the Wreath and Crest is part of a larger sales trend happening among domestics - with other models like the Dodge Dart and Ford Fusion doing well - and overall US car sales. Head over to Bloomberg for the big picture and role the ATS plays in it.

2020 Cadillac CT6 losing the 3.0-liter TT V6?

In April we learned Cadillac would no longer offer the 2.0-liter four-cylinder on the CT6. The same day we heard the news, the CT6 configurator showed that engine option gone, leaving three engines on the menu. That menu could lose another option come 2020, according to a report in AutoVerdict. The site says it got an order guide for the 2020 CT6, and the 3.0-liter twin-turbo V6 won't make it to the new year. That engine was once the top-tier choice, since eclipsed by the detuned 4.2-liter twin-turbo Blackwing V8 imminently available on the Platinum trim. AutoVerdict also read in the order guide that the horsepower figures haven't been finalized for next year's model. As it stands, the entry-level 3.6-liter six-cylinder makes 335 horsepower and 284 pound-feet of torque, the 3.0-liter twin-turbo V6 produces 404 hp and 400 lb-ft, and the 4.2-liter V8 ginning up 500 hp and 574 lb-ft when it arrives. Retiring the middle option ostensibly puts a big ol' gap in output and pricing between the two models left. Right now $24,200 separates the entry-level Premium Luxury from the Platinum. However, since the present Platinum uses the 3.0-liter, it's safe to guess that the 4.2-liter V8 will cost more, creating a larger gap. The Sport model in between uses the 3.0-liter, too. Perhaps that goes away, or maybe it stays and gets further cosmetic upgrades to give it more edge and a higher price. Another change coming to the 2020 CT6 is its induction into Cadillac's metric-unit torque-based badging system. This, remember, converts pound-foot torque into Newton-meters, then rounds up to the nearest 50. That means the 3.0-liter V6 will wear a 400 badge, the 4.2-liter V8 gets an 800T badge - the T standing for turbo. The year's been full of engine rationalizations at General Motors. Theories about the CT6 dropping the 2.0-liter figured it might have been about making space above the CT5, or guaranteeing supply for other GM models that use the engine, like the Cadillac XT4. The folks at AutoVerdict suspect the 3.0-liter TTV6 could be making the move to the CT5, and to the hot-headed CT4-V we'll be getting a look at come the end of this month. Related Video: