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Trucks and tidbits from GM's earnings report

General Motors announced this morning that 2018 was a good year for it financially, thanks in large part to the company's performance in North America, which was predicated, according to the company, on "strong pricing, surging crossover sales, successful execution of the company's full-size truck launch, growth of GM Financial earnings, and disciplined cost control." GM reported full-year income of $8.1 billion and EBIT-adjusted income of $11.8 billion. Crossover sales in 2018 were 1,034,808, an increase of 7 percent compared to 2017 deliveries. Throw in the body-on-frame SUVs and the ute number is a total 1,295,700. But let's face it: It is the trucks that really matter. The Chevy Silverado and Colorado, the GMC Sierra and Canyon. Altogether, GM sold 973,463 pickups in the U.S. in 2018. Although Ford gets bragging rights for F-Series sales, GM gets to point out that it has a greater aggregate number. An important factor regarding the trucks and the reported income is that during the last quarter, more than 90 percent of the new 2019 trucks were crew cabs (which have a higher sticker), and at GMC more than 70 percent were Denali and AT4 models (which have even higher stickers). According to reporting by Bloomberg, GM's pickup trucks combine for $65 billion in annual revenue. Clearly when the 2018 sales of the Silverado — 585,581— dwarf the combined sales of both Buick (206,863) and Cadillac combined (154,702), pickups are what matter to the overall health of the company in a way that it is difficult to otherwise achieve. The "disciplined cost control" is something that is very much in the public eye right now, as the company is taking out thousands of its workers, and there is still the "unallocated" plant situation and other plants that will remain under capacity. The numbers in GM's earnings report probably made Unifor members' heads explode in consternation, coming fresh off their Super Bowl ad: " GM, you may have forgotten our generosity, but we'll never forget your greed." But there are a couple of curiosities in the full GM earnings release. One is that so far as its autonomous efforts go, it mentions only that (1) in the first quarter of 2018 Cruise introduced a production-ready autonomous vehicle, and (2) Cruise attracted $5 billion in external capital from SoftBank and Honda. Not a whole lot of love for autonomy. Good thing they have the trucks to fund the program, to say nothing of the external capital.

5 reasons why GM is cutting jobs, closing plants in a healthy economy

DETROIT — Even though unemployment is low, the economy is growing and U.S. auto sales are near historic highs, General Motors is cutting thousands of jobs in a major restructuring aimed at generating cash to spend on innovation. It's the new reality for automakers that are faced with the present cost of designing gas-powered cars and trucks that appeal to buyers now while at the same time preparing for a future world of electric and autonomous vehicles. GM announced Monday that it will cut as many as 14,000 workers in North America and put five plants up for possible closure as it abandons many of its car models and restructures to focus more on autonomous and electric vehicles. The reductions could amount to as much as 8 percent of GM's global workforce of 180,000 employees. The cuts mark GM's first major downsizing since shedding thousands of jobs in the Great Recession. The company also said it will stop operating two additional factories outside North America by the end of next year. The move to make GM get leaner before the next downturn likely will be followed by Ford Motor Co., which also has struggled to keep one foot in the present and another in an ambiguous future of new mobility. Ford has been slower to react, but says it will lay off an unspecified number of white-collar workers as it exits much of the car market in favor of trucks and SUVs, some of them powered by batteries. Here's a rundown of the reasons behind the cuts: Coding, not combustion CEO Mary Barra said as cars and trucks become more complex, GM will need more computer coders but fewer engineers who work on internal combustion engines. "The vehicle has become much more software-oriented" with millions of lines of code, she said. "We still need many technical resources in the company." Shedding sedans The restructuring also reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 percent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 percent cars just five years ago. GM is shedding cars largely because it doesn't make money on them, Citi analyst Itay Michaeli wrote in a note to investors. "We estimate sedans operate at a significant loss, hence the need for classic restructuring," he wrote. The reduction includes about 8,000 white-collar employees, or 15 percent of GM's North American white-collar workforce. Some will take buyouts while others will be laid off.

GM under fire from safety advocates over braking problem caused by recall fix

Safety experts are lambasting General Motors over what they say is the automaker’s slow notification of owners of certain 2019 sedans and trucks that a recall fix could cause power braking to fail and increase the risk of a crash, the Detroit Free Press reports.  GMÂ’s original recall in December targeted about 550,000 Cadillac CT6 sedans and Chevrolet Silverado 1500 and GMC Sierra 1500 pickups, all from the 2019 model year, over potentially defective electronic stability control and antilock brakes. In that case, GM said the errors would not show up as a diagnostic warning on the instrument cluster. But after GM had done recall work on 162,000 vehicles, about 1,700 owner have complained that their power brakes didnÂ’t work after they had the recall done and then used the OnStar app to start their vehicle. GM then issued a supplemental fix for customers whoÂ’d already had their vehicles serviced. In this case, a diagnostic warning should illuminate saying either “Service Brake Assist” or “Service ECS,” which GM says is a signal that a customer should not drive the vehicle and instead call their dealer, which will tow the vehicle and have it repaired. Safety advocates say the automaker hasnÂ’t gone far enough to protect customers. “The fact that you could potentially start a vehicle and not have brakes is a pretty risky proposition,” Sean Kane, president of the Safety Research and Strategies, which works on auto issues for plaintiffs and governmental organizations, told the Freep. “The fact that they wouldnÂ’t notify owners (sooner) is pretty stunning.” GM told the Freep it was required to notify the National Highway Traffic Safety Administration and file paperwork before it notified customers about the original recall, which was made Dec. 12. It then had to investigate and resolve the problem created by its original recall fix before alerting customers. GMÂ’s call center and dealers are contacting the remaining 900 customers who havenÂ’t yet had the update made to the original recall repair. GM also hired a vendor to send recall letters to the 550,000 customers affected by the original recall notifying them about the update. There are no known injuries or deaths related to the problem. Read the Freep story here.