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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.

GM issues stop-sale order for 2024 Chevy Colorado, GMC Canyon pickups

General Motors has issued a stop sale for the midsize 2024 Chevrolet Colorado and 2024 GMC Canyon pickups due to software problems, the Detroit Free Press reported Tuesday. The newspaper had previously reported that trucks were piling up in GM's Wentzville Assembly holding lot. Well, now we know why. As happened with the 2024 Chevy Blazer EV late last year, the midsize pickups are grounded until further notice.  While GM declined to reveal the nature of the software issues to the Free Press, we've seen the chaos inflicted by the company's current digital suite manifest in the Blazer's rocky launch. In some cases, those EVs were effectively bricked (whether permanently or temporarily) by glitches that plagued the infotainment. And because modern infotainment touches virtually every aspect of vehicle operation, what might sound like a trivial issue can quickly snowball. The Edmunds test vehicle produced "the single longest list of major faults" the outlet had ever seen.  Some trucks have already shipped to dealers and will remain on hold there until serviced and released; it appears GM will continue to hold trucks at its Missouri production facility until they receive software updates to address the ongoing issues. GM did not provide a timetable for software fixes or the resumption of customer deliveries.       

Chevy Colorado and GMC Canyon get trim levels reworked again

GM Authority reports that GM has fiddled with trim packages on the Chevrolet Colorado and GMC Canyon for the 2021 model year, eliminating the base trims on both pickups and implementing small price changes. When the new model year goes on sale, the Chevy will lose the rear-wheel drive Base Extended Cab with the automatic transmission that starts at $22,395 after a $1,095 destination charge. The new entry-level is going to be the Work Truck model with the extended cab in rear-wheel drive, starting at $26,595 assuming the destination charge holds steady. That represents a $4,200 jump over the base 2020 model. MSRPs for the entire Work Truck lineup, from base to the Crew Cab Long Box, rise by $400. Elsewhere in the Colorado line, the four Z71 trims go down by $100, while the two ZR2 trims increase by the same amount. Only the six LT trims don't see any change.  The GMC side is a bit more involved due to previously announced changes. The 2020 Canyon comes in SL, Base Canyon, SLE, SLT, All Terrain, and Denali steps. Last month, GM Authority reported the 2021 Canyon would give all that up for the new names Elevation Standard, Elevation, AT4, and Denali. Since the SL base model retires in 2021, the Elevation Standard takes over at the entry level. Unlike on the Colorado, which sheds one trim, the Canyon lineup gets pared from 20 total combinations of trims, cab sizes, and bed lengths, to 14 total combinations. But like the Colorado, due to the loss of the cheapest configuration, the least expensive 2021 Canyon becomes $4,200 more expensive than in 2020, assuming the destination price remains the same. What's more, the 2021 Elevation Standard pricing adds $700 or $800 to the prices of the 2020 Canyon base and SLE models. There are more increases up the range. The 2021 Elevation trim replaces a combination of SLE and SLT models, bumping prices up by up to $900. In 2020, the least expensive All Terrain model is the Extended Cab Cloth for $37,695. For next year, the least expensive AT4 trim is the Crew Cab Short Box for $39,295. Like-for-like, though, the AT4 represents a $300 premium over the 2020 All Terrain Crew Cab Short Box. Three Denali trims will still stand at the top of the heap, each one going up by $400 in 2021. Until GM details the equipment changes, we won't know how the new pricing equates to value.