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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.

GMC rules out subcompact crossover to go premium, focus on trucks

Don't wait for GMC's on-again, off-again baby crossover any longer. The company confirmed it has no plans to enter the growing car-based subcompact crossover segment in the near future because the expansion wouldn't fit its image. "I'm going to give you a definitive no on that one," answered Mark Alger, a regional marketing manager for GMC's Canadian division, when asked about the entry-level segment by GM Authority. "We want to position GMC as a premium brand, focus on our trucks, and capitalize on the AT4 name," he added. Positioning GMC as a premium brand wouldn't prevent officials from giving an entry-level the green light; Audi, BMW, and Mercedes-Benz all sell cars priced in the vicinity of $30,000. Focusing on trucks like the Sierra and the Canyon makes sense, however, because they compete in a bigger segment of the market where profit margins are much wider. It helps that GMC doesn't have to worry about markets outside of North America; it's not concerned about its sales and image in, say, Spain. We've heard speculation about GMC's entry-level model since the Granite concept (pictured above) made its debut during the 2010 Detroit auto show. It was approved for production in 2010, approved again the following year (complete with rear suicide doors), and canceled in 2012, but the reports never went away. The segment's popularity added credibility to the recent murmurs describing a born-again Granite aimed at the Honda HR-V and the Toyota C-HR, among others. The Chevy Trax and Buick Encore are both GM vehicles that compete in this segment.  GMC also canceled a body-on-frame, Bronco-taming SUV, according to a recent report. The truck-focused automaker promised every nameplate in its range will receive the rugged AT4 treatment by 2021, however, and it announced plans to show the off-road-ready Canyon in early 2020.

GMC confirms Hummer EV will be joined by an electric Sierra, or Sierra-like, pickup

GMC will step into the electric vehicle arena for the first time when it begins building the Hummer EV in 2021. While it's not planning on becoming an electric-only brand, it has more battery-powered models in the pipeline. "There will be an all-electric Sierra pickup, but no timeline yet. But, the plan is to make it electric; this whole electric thing is a moving target," Lynn Thompson, the president of a Buick-GMC-Cadillac dealership in Missouri, told the Detroit Free Press. He said executives revealed those plans during a national dealer meeting. What remains to be seen is whether the truck will be an electric variant of the Sierra as Thompson said, or if it will arrive as a standalone electric truck with Sierra-like dimensions and capabilities. Sister company Chevrolet is also planning to launch an electric pickup in the coming years, and it strongly hinted it will take the second route. Its entry into the segment won't look like a Silverado, and nothing seriously suggests it will be badged as one. It will also be interesting to watch how GMC ensures that the truck doesn't overlap with the Hummer EV, which will exclusively be offered as a four-door pickup with a relatively short cargo box when it arrives in stores as a 2022 model. Our crystal ball tells us the Hummer will be marketed as a more expensive model aimed at weekend adventurers who want to make a statement, while the Sierra-like model will be cheaper and primarily aimed at buyers who merely want a truck, whether they're commuters, contractors, or fleet operators. Chevrolet's entry into the segment will slot beneath these two models. General Motors used this strategy nearly 20 years ago to keep the Hummer H2, the GMC Yukon, and the Chevrolet Tahoe in separate corners of the same room. GMC's electric truck could share powertrain and chassis components with the Hummer EV. It might also be built in the same Hamtramck, Michigan, factory that parent company General Motors is funneling $2.2 billion into. Regardless of the path it takes, GMC is not going all-electric. "[GMC boss] Duncan [Aldred] said we're certainly not going to abandon our internal combustion engine vehicles because that's our core business, and that was good to hear. It's to let people know they're not going down the same road as Cadillac," a dealer who asked to remain anonymous said. Cadillac might go EV-only by 2025, starting with a crossover named Lyriq, and many of its dealers have refused to spend $200,000 on upgrades.