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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.

GM 8-speed transmission lawsuit granted class action certification

A story on Autoblog about potentially faulty 8-speed automatic transmissions from General Motors in 2019 has, as of the day this was published, 166 comments, mostly from owners of cars and trucks who say they are experiencing "a hesitation, followed by a significant shake, shudder, jerk, clunk, or 'hard shift' when the vehicle's automatic transmission changes gears." At the time, lawyers were seeking statewide classes in at least six states. As of today, the Detroit Free Press reports that a judge has granted class action status to a lawsuit brought by 39 plaintiffs across 26 states covering the transmission issue. The lawsuit specifically applies to vehicles that are equipped with GM's 8L90 or 8L45 8-speed automatic transmissions made between 2015 and March 1, 2019. Both of these transmissions are similar units, the 8L45 being slightly lighter version used in fewer vehicles than the beefier 8L90, and are designed for front-engine, rear- or all-wheel drive applications. The lawsuit alleges that the erratic transmission behavior makes some vehicles unsafe to drive. Ted Leopold, partner at Cohen Milstein and the court-appointed lead counsel for the case, said in a statement, "General Motors knowingly sold over 800,000 eight-speed transmission vehicles, which they knew to be defective for years, and yet made the business decision not to tell its customers before purchase." He added, "Dealers were directed to tell the customers that harsh shifts were ‘normal' or ‘characteristic.Â’ Such decision making is both highly irresponsible and emblematic of what GM believes it can get away with." The vehicles included in the court order with potentially faulty transmissions includes: 2015-2019 Chevrolet Silverado 2017-2019 Chevrolet Colorado 2015-2019 Chevrolet Corvette 2016-2019 Chevrolet Camaro 2015-2019 Cadillac Escalade and Escalade ESV 2016-2019 Cadillac ATS, ATS-V, CTS, CT6, and CTS-V 2015-2019 GMC Sierra, Yukon, Yukon XL, and Yukon Denali XL 2017-2019 GMC Canyon Some additional details of the lawsuit can be found at the Cohen Milstein site, including claims that "since 2015, GM has issued thirteen versions of a “technical service bulletin,” or “TSB,” related to this shifting issue alone." The statement from Cohen Milstein says that a "second action regarding GM vehicles with 8L transmissions is also underway in Battle v. General Motors, LLC, 2:22-cv-108783.

Cadillac, Buick and Chevy decisions impacted by worries abroad

European Concerns Drive GM, But Beware Of The French Connection
GM's bid to rationalize Europe will impact the products that will be offered domestically.
It seems that Europe is defining the future of General Motors more so than its home North American market. Having axed Saturn, Pontiac and Hummer, GM has done a fairly good job of repositioning its remaining four divisions, Cadillac, Chevrolet, Buick and GMC. Cadillac carries the luxury banner. Chevrolet is aimed at the masses with cars and trucks along with a nod to performance thanks to Camaro and Corvette. Buick bridges the premium gap between Chevy and Cadillac, while GMC offers a hardcore work/upscale proposition.