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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.

Frustrated GM investors ask what more Mary Barra can do

DETROIT — General Motors Co Chief Executive Mary Barra has transformed the No. 1 U.S. automaker in her almost five years in charge, but that is still not enough to satisfy investors. Ahead of third-quarter results due on Oct. 31, GM shares are trading about 6 percent below the $33 per share price at which they launched in 2010 in a post-bankruptcy initial public offering. The Detroit carmaker's stock is down 22 percent since Barra took over in January 2014. After hitting an all-time high of $46.48 on Oct. 24, 2017, the shares have declined 33 percent. In the same period, the Standard & Poor's 500 index has climbed 7.8 percent. Several shareholders contacted by Reuters said GM could face a third major action by activist shareholders in less than four years if the share price does not improve. "I've been expecting it," said John Levin, chairman of Levin Capital Strategies. "It just seems a tempting morsel to somebody." Levin's firm owns more than seven million GM shares. Barra has guided the company through the settlement of a federal criminal probe of a mishandled safety recall, sold off money-losing European operations, and returned $25 billion to shareholders through dividends and stock buybacks from 2012 through 2017. GM declined to comment for this story, but the company's executives privately express frustration with the market's reluctance to see it as anything more than a manufacturer tied mainly to auto market sales cycles. GM's profitable North American truck and SUV business and its money-making China operations are valued at just $14 billion, excluding the value of GM's stake in its $14.6 billion Cruise automated vehicle business and its cash reserves from its $44 billion market capitalization. The recent slump in the Chinese market, GM's largest, and plateauing U.S. demand are ratcheting up the pressure. GM is one of the few global automakers without a founding family or a government to serve as a bulwark against corporate raiders. In 2015, a group led by investor Harry Wilson pressed GM to launch a $5 billion share buyback, and commit to what is now an $18 billion ceiling on the level of cash the company would hold. In 2017, GM fended off a call by hedge fund manager David Einhorn to split its common stock shares into two classes. Einhorn, whose firm still owned more than 21 million shares at the end of June, declined to comment about GM's stock price. Other investors said there were no clear alternatives to Barra's approach.

Buick Envision interior just as nice as its exterior

GM China loosed more photos of the all-new 2021 Buick Envision, this time of the interior. We are happy to report that the cabin design is just as pleasing to the eye as the exterior. When the 2021 model shows up for the reunion with its earlier model-year siblings, no one will recognize it. The modestly dated interior of the current crossover with its too-small infotainment screen and Rorschach-blot button placement is all gone. The gaudy curves and textures on the current instrument panel give way to a simple, split-level, bi-color form. What's more, the IP subtly carves out distinct driver and passenger spaces, a design trait normally reserved for sports cars. When Buick and GMC design boss Helen Emsley said the coming Envision would possess "striking styling designed to combine the expressiveness of a car with the practicality of an SUV,” she wasn't lying. The new steering wheel picks up more substantial spokes decorated with linear buttons instead of the circular pads, and its center cap is wider and no longer reminiscent of an alien face. The dash's dark portion up top houses a 10-inch infotainment screen canted at an 18-degree angle for the driver's ease-of-use. Air vents accentuate the break between the top and bottom of the instrument panel. Beneath the center vents, in the cabin-colored portion of the dash, are a slick set of climate controls. The pushbutton gear selectors along the left side of the center tunnel come from the China-market Enclave. And even the cupholders are handsome. The Envision Avenir gets a few exterior changes like a mesh grille and nicer wheels to set itself apart, the interior wearing Ivory White and Jazz Black hues and diamond-stitched seats. We might prefer the interior with peanut-butter brown and black even more. And suddenly, the Cadillac XT4 could have a problem; the Buick and the Cadillac share the E2 platform, but one of them — in photos, at least — is incontestably more fetching. As for tech, expect Android Auto and Apple CarPlay standard, and driver safety features such as automatic emergency braking with pedestrian detection, lane-keep assist, and the automaker's safety alert seat. Regular conveniences will include space for five, nearly two dozen storage cubbies, and an available giant panoramic moonroof. The only engine we've heard tell of so far is a 2.0-liter turbocharged unit, expected to be a carryover mill with 252 horsepower and 295 pound-feet of torque.