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GM to cut production at 5 plants in North America, kill several models

DETROIT/WASHINGTON — General Motors Co said on Monday it will cut production of slow-selling models and slash its North American workforce in the face of a stagnant market for traditional gas-powered sedans, shifting more investment to electric and autonomous vehicles. The announcement is the biggest restructuring in North America for the U.S. No. 1 carmaker since its bankruptcy a decade ago. GM said it will take pre-tax charges of $3 billion to $3.8 billion to pay for the cutbacks, but expects the actions to improve annual free cash flow by $6 billion by the end of 2020. GM plans to halt production next year at three assembly plants: Lordstown, Ohio, Hamtramck, Michigan, and Oshawa, Ontario. The company also plans to stop building several models now assembled at those plants, including the Chevrolet Cruze, the Cadillac CT6 and the Buick LaCrosse, the sources said. Sources said the Chevrolet Volt, Impala and Cadillac XTS would also be discontinued. Signs of the demise of six passenger-car models have been swirling since July. Plants in Baltimore, Maryland, and Warren, Michigan, that assemble powertrain components have no products assigned to them after 2019 and thus are at risk of closure, the company said. It will also close two factories outside North America, but did not identify those plants. The AP reported that 14,700 jobs would be affected. Some 8,100 of those would be white-collar jobs reduced through buyouts or layoffs. The No. 1 U.S. automaker signaled the latest belt-tightening in late October when it offered buyouts to 50,000 salaried employees in North America. The company also said it will cut executive ranks by 25 per cent to "streamline decision making." Some 6,000 factory workers could lose their jobs or be transferred to other plants. Its shares were last up 6.2 percent at $38.16. Tariff 'headwinds' and cost-cutting GM Chief Executive Officer Mary Barra told reporters on Monday the company can reduce annual capital spending by $1.5 billion and increase investment in electric and autonomous vehicles and connected vehicle technology because it has largely completed investing in new generations of trucks and sport utility vehicles. Some 75 percent of its global sales will come from just five vehicle architectures by early in the 2020s. It plans to reduce annual capital spending to $7 billion by 2020 from an average of $8.5 billion a year during the 2017-2019 period.

Chevy Bolt EV's battery shows big improvements over Spark's

Plug-in vehicle battery technology moves fast, and all you need to do to see this in action is to take a look at the new 60-kWh lithium-ion pack inside the 2017 Chevy Bolt EV. Well, you need to do that and then compare it to the battery packs inside of GM's other plug-in vehicles. And you don't even to go as far back as the EV1 to see progress. Let's start with what we know about the new Bolt's pack. It is supposed to drive the Bolt EV over 200 miles on a full charge. It weighs 960 pounds and is made up of 288 cells. Chevy's other all-electric car, the limited-availability Spark EV, had a 19-kWh pack and offered 82 miles of range. It had 192 cells and weighed 474 pounds. So, in the few years since the Spark EV was released, GM engineers have figured out how to get three times the energy capacity and almost two-and-a-half times more range out of a pack that weighs only about twice as much. And that doesn't even get to the price drops. GM has figured out how to get 3x the energy capacity and almost 2.5 times more range out of a pack that weighs only twice as much. Speaking of those 288 cells, that number might sound familiar to regular readers because that's exactly how many are in the new Chevy Volt. But the packs in the Volt and the Bolt are entirely different beasts. For one thing, while the Volt cells are made by LG Chem in Holland, MI, LG Chem will make the Bolt's cells in South Korea. The cell chemistries are also different. We spoke with GM engineer Tim Grewe (again) and while he declined to answer some of our Bolt battery pack questions until more details are unveiled at the SAE World Congress in April, he was able to explain a few things. "The cell inside the Chevy Bolt EV was specifically designed for EV range so it's up on energy," he said. "That's a different cell chemistry than on the extended range Chevy Volt, which is a smaller pack, smaller energy but more power per cell. We work with all of those vehicle requirements and customer demands and we say how do we meet this and we change the chemistry to make it all work." Comparing the 60 kWh in the Bolt and the 18.4-kWh pack in the Volt is really one of those apples to oranges issues, he said. "If you look at the Volt battery pack, how it went from where it was and where it's up to, from 38 miles to 50 miles, that was basic, overall industry improvement. Now, the 18 [kWh] to the 60 [kWh] is extended range vs. EV.

GM raises 2023 guidance on strong sales, higher profits

General Motors beat first-quarter profit estimates and raised its full-year earnings and cash-flow guidance after vehicle demand at the start of the year surpassed expectations. Its shares rose in premarket trading. GM made $2.21 a share in adjusted profit in the first quarter, compared to a consensus forecast of $1.72 a share. Revenue rose 11% to $39.99 billion, it said Tuesday, which was more than the $39.24 billion analysts expected. The stronger results stem from rising sales in the US, even in the face of higher interest rates and inflation. GM executives said demand was strong enough to revise 2023 guidance upward, boosting profit estimates for the year by $500 million to between $11 billion and $13 billion. “We did it with strong production and inventory discipline and consistent pricing,” GM Chief Financial Officer Paul Jacobson said on a call with journalists. “All in all, weÂ’re feeling confident about 2023.” The Detroit automaker raised per-share full-year guidance to between $6.35 and $7.35, up from $6 to $7 a share, and said free cash flow would also increase by $500 million to a range of $5.5 billion to $7.5 billion.  GMÂ’s shares pared a gain of as much as 4.4% before the start of regular trading Tuesday, rising 3.5% to $35.50 as of 6:55 a.m. in New York. The stock was up 1.9% for the year as of the close on Monday.  North American Strength The automakerÂ’s sales were particularly strong in North America, where first-quarter earnings rose before interest and taxes rose to $3.6 billion. Vehicle sales rose 18% to 707,000 in the region. Jacobson said the company originally expected to sell 15 million vehicles in the US this year, slightly less than the 15.5 million annualized rate automakers foresaw in the first quarter. North American demand was enough to offset a weak performance in China, GMÂ’s second-largest market. The automaker continues to struggle in the country, where its vehicle sales fell 25% to 462,000 vehicles in the quarter. Profits from its joint ventures in the market slumped 65% to $83 million.  The market has struggled overall in the wake of Covid-19 restrictions and foreign automakers have had to overcome a growing preference for Chinese brands by competing on price, squeezing profit margins. The situation in China probably wonÂ’t significantly improve until the second half of the year, according to Jacobson. GM remains on target to sell 150,000 electric vehicles this year, the CFO said.