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GM profit dips on truck changeover, but beats estimates

DETROIT — General Motors on Thursday reported a higher-than-expected quarterly profit despite a drop in production of high-margin pickup trucks, as it gears up for new models that are expected to boost profits next year. Like rivals Ford and Fiat Chrysler Automobiles, GM is banking on highly-profitable Chevy Silverado and GMC Sierra pickup trucks to lift profits, as consumers shift away from traditional passenger cars in favor of these larger, more comfortable trucks, SUVs and crossovers. During the first quarter, the process of changing over to GM's new pickups resulted in a drop in production of 47,000 units. GM Chief Financial Officer Chuck Stevens said the production drop had resulted in a drop in pre-tax profit of up to $800 million. Earlier this year, GM said its 2018 profits would be flat compared with 2017, but expected its all-new pickup trucks would boost margins starting in 2019. On Thursday, GM reiterated its full-year 2018 forecast for adjusted earnings in a range from $6.30 to $6.60 per share. The automaker said capital expenditures were more than $500 million higher in the quarter because of investments its new pickup trucks and a family of low-cost vehicles under development with Chinese partner SAIC Motor Corp. On Wednesday, rival Ford said it would stop investing in most traditional passenger sedans in North America. CFO Stevens told reporters on Thursday that GM has "already indicated that we will make significantly lower investments on a go-forward basis" in sedans. 2019 GMC Sierra View 21 Photos GM benefited from a lower effective tax rate in the quarter, but adjusted pre-tax margin fell to 7.2 percent from 9.5 percent a year earlier. Stevens said the company's profit margin should hit 10 percent or higher in the second quarter and for the full year. GM said material costs were $700 million higher in the first quarter, and it expects those costs to continue rising. The automaker said it would counter those increases with cost cutting measures. "It is a more difficult environment than it was three or four months ago," Stevens said when asked about rising commodity prices from potential steel and aluminum tariffs announced by the Trump administration. "But we are confident we can continue to offset that." The company reported quarterly net income of $1.05 billion or $1.43 per share, a drop of nearly 60 percent from $2.61 billion or $1.75 per share a year earlier. Analysts had on average expected earnings per share of $1.24.

AWD turbodiesel Equinox, Terrain dropped for 2020

Citing low demand, General Motors is dropping the AWD diesel options off the Chevrolet Equinox and GMC Terrain roster. Chevrolet spokesman Kevin Kelly confirmed to CarsDirect that for 2020, the diesel versions of these SUVs will only be offered with front-wheel-drive. CarsDirect notes that with the AWD diesel Equinox and Terrain gone, the only AWD diesel option in this class is the Mazda CX-5 Skyactiv diesel, which is significantly more expensive: As the AWD diesel CX-5 is only available in a fully loaded Signature specification, the $42,045 price tag is almost $10k heftier than the cheapest comparable Equinox, the AWD 1.6-liter diesel LT which starts from $32,495. The 2019 GMC Terrain AWD SLE costs $34,795 in comparison, which works out to being around $7,200 cheaper than the Mazda. The higher trim levels for the Equinox and Terrain are Premier and SLT, respectively. Some reasoning behind the AWD diesel GM SUV's low uptake is their own price difference to base FWD gasoline models: you can get a 1.5-liter Equinox for less than §25,000 listed. While the 2.2-liter Mazda has plenty more power at 168 hp and 290 lb-ft, compared to 137hp and 240 lb-ft in the 1.6-liter GM SUVs, the Equinox and Terrain are notably more frugal – they are rated 32mpg combined, while the Mazda can manage 28 mpg. With better fuel economy and a significantly lower list price, the General Motors twins are at least more wallet-friendly when it comes to numbers, and as the vehicles will cease to be built in that configuration there's likely to be some cash on the hood on ones in stock. News Source: CarsDirectImage Credit: Chevrolet Chevrolet GM GMC confirmed gmc terrain chevrolet equinox

Before Chevrolet's Redline, there was the Saturn Red Line

While Chevy rolls out Redline special editions across more of the lineup at this year's Chicago Auto Show, we've been eating some 'member berries and started thinking about the last time GM used the term. Back in 2004, Saturn rolled out Red Line (two words) editions of the Ion and Vue. The lineup was joined by the Sky Red Line in 2007, and the second-generation Vue kept the tradition going in 2008. This was in the heady days of the mid-2000s, before the financial crisis and GM's bankruptcy reorganization that saw the end of Saturn. The press release headline for the 2008 Sky is now cringe-worthy: "Hot-selling Sky helps drive Saturn product renaissance." Performance lineups were the hot new thing, as automakers attempted to cash in on the tuner trend popularized by The Fast and the Furious. Chevy had SS models, Pontiac had GXP, and Saturn had Red Line. Across the Detroit Metro area, Dodge had a slew of SRT models, and Ford's Special Vehicle Team brought us the SVT Lightning pickup, the SVT Focus, and a smattering of hopped-up Mustangs. The performance cred of Red Line models varied from car to car. The Ion Red Line shared the same engine as the original Chevy Cobalt SS, a 205-horsepower supercharged 2.0-liter four-cylinder, 65 hp more than stock. Car and Driver tested one with a 0-to-60-mph time of 6.1 seconds and said the Ion "tears down the wall that has separated enthusiasts from the Saturn brand for so long." The Vue Red Line, meanwhile, came with the same optional Honda-sourced 3.5-liter V6 you could get in the regular Vue, and added a stiffer, lower suspension, bigger wheels with more aggressive rubber, and recalibrated steering assist. When the Vue was redesigned for the 2008 model year, the Vue Red Line was a similar proposition. The engine was now from GM, and up 7 horsepower to 257, but you could get it in both Red Line and XE trim. Aside from the tire and suspension upgrades, Red Line models now came with a unique front fascia and rear exhaust cutouts. The most exciting Red Line, of course, was the high-performance version of the Sky roadster, which shared underpinnings with its Pontiac Solstice twin. This model came with GM's hot 2.0-liter Ecotec Turbo, good for 260 horsepower. The extra power was crucial in covering up the Sky's unfortunate manual gearbox ratios, which left the non-turbo model aching for torque in lower gears. As we all know, Saturn was taken by the grim reaper in 2009 after an attempt to sell the brand to the Penske Group.