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Huge, pricey trucks haul jobs and profits for the Detroit Three

DECATUR, Texas — Mickey McMaster is on his 12th pickup truck. The 61-year old farm equipment dealer in Decatur, Texas, two weeks ago treated himself to a 2019 GMC Denali for around $69,000 — a reward for long hours at work. "For me this is the Cadillac of trucks, it's a real luxury vehicle," McMaster said. "I've worked my way up to afford a truck like this and it shows that I've earned it." McMaster is the kind of customer General Motors Co is banking on as it plans to add 1,000 jobs at a plant in Flint, Michigan that will build a new generation of its largest pickups. Demand from Texas and other heartland states for big pick-ups is providing a lifeline to many workers the No. 1 U.S. automaker is laying off at plants elsewhere. The Detroit Three automakers and thousands of their U.S. workers are counting on customers like McMaster to keep buying bigger and more luxurious pickup trucks even if overall U.S. vehicle demand weakens this year, as most analysts predict. At Flint, GM will build a new generation of its heavy-duty Chevrolet Silverado and GMC Sierras, including luxury models that are some of the most profitable vehicles on the planet. GM, Ford Motor Co and Fiat Chrysler Automobiles NV's Ram division own the segment and are each doubling down with new or redesigned models launching this year. Sales of heavy-duty pickups in the United States have grown to more than 600,000 vehicles a year, up more than 20 percent since 2013, according to industry data. Prices for luxury models can easily top $70,000. GM on Tuesday celebrated the launch of a new generation of heavy-duty GMC and Chevrolet pickups at the assembly plant in Flint, Michigan, that is now building all such trucks for the company. At the same time that GM is laying off thousands of U.S. workers and planning to shutter five North American factories, Flint is hiring. The plant runs on three daily shifts, six days a week. As the new model's assembly system ramps up, the plant's capacity will increase by more than 25 percent, plant manager Mike Perez told Reuters. The Flint plant plans to add 1,000 workers, more than half of the 1,500 factory workers who have asked to transfer from plants GM has targeted for shutdown as part of CEO Mary Barra's restructuring plan. "We're bringing in 50 to 100 people every week," said Perez. Workers last week were still finishing the job of retooling the Flint factory to build the new heavy-duty trucks as part of a $1.5 billion investment project.

Chevrolet will preview electrified Silverado-like truck at CES 2021

After abandoning its fight against California's lawmakers, General Motors is shifting its electrification offensive into high gear. CEO Mary Barra will give the opening keynote address at the 2021 Consumer Electronics Show (CES), which will be held online, and Chevrolet will provide a peek at its electrified pickup during the event. Insiders familiar with the carmaker's plans told Bloomberg that Barra's address will highlight ways that electrification can improve the environment and society in general. General Motors president Mark Reuss will speak, too, and his remarks will be followed by a video that will highlight several future products, including what the sources referred to as "a plug-in Chevrolet pickup, some Cadillac models, and vehicles for other brands." These comments ask more questions than they answer, because plug-in means many things in this context. Chevrolet's electric Bolt is a plug-in vehicle, as is the upcoming GMC Hummer, but the plug-in hybrid Jeep Wrangler 4xe is one, too, and it's clearly not all-electric. It's often been assumed that Chevrolet's upcoming electrified truck will be electric, but it might arrive with a hybrid powertrain or a gasoline-powered range extender. Chevrolet could also follow Ford's lead and plant a stake in both the hybrid and the electric pickup segments. It's too early to tell if Chevrolet will unveil the same truck it previewed during a presentation earlier in 2020. Shown briefly, it wore a highly futuristic design that gave it a sleeker look than the current-generation Silverado. Cadillac's presentation promises to be interesting, because the company hinted it might abandon gasoline entirely by 2025, several years earlier than expected, even though its dealers aren't all on board with the shift. Going electric-only in about four years would force the brand to conduct a massive overhaul of its range. As of writing, there is not a single electric Cadillac in showrooms, but the Lyriq will arrive in late 2022 as a 2023 model. It's difficult to tell what's in store for other brands, but there are several cars that General Motors could show during CES. Buick doesn't sell an electric car in the United States yet, for example. Alternatively, GMC is working on an SUV variant of the Hummer, and it has started developing an electric truck. Going back to Chevrolet, our crystal ball tells us we'll see more of the 2022 Bolt EUV during the next edition of the tech show, too.

GM threatens predatory dealers with order cancellations, non-transferrable warranties

General Motors will launch a second salvo against misbehaving dealerships next week with a new set of policies aimed at curbing predatory markup strategies. With the new Chevrolet Corvette Z06, GMC Hummer EV SUV and Cadillac Escalade-V about to head into production, GM is putting its foot down yet again. Dealers that attempt to circumvent GM's markup restrictions by dealing directly with brokers or other resellers could find themselves in a particularly nasty spot, as the company is threatening to withhold future allocations and end the transferability of warranties when dealers facilitate the reselling of vehicles within 12 months.  While this may help curb some dealership chicanery, it's possible the real loser in such a deal could end up being the customer who unwittingly ends up with an un-warrantied vehicle. We suspect GM has accounted for that, but we'll have to wait until next week to find out exactly how these new policies will be enforced.