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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.

EcoCar2 is on the hunt for a better, cleaner Chevy Malibu [w/video]

The students spent three years transforming an ordinary Chevy Malibu into a revolutionary vehicle. Not far from the building where General Motors once invented the Chevy Volt, a dozen or so college students are standing on the blacktop alongside a test track, watching a professional driver push the limits of a plug-in hybrid car they've built that's far more radical. These students, from Colorado State University, have spent the past three years transforming an ordinary Chevy Malibu into a revolutionary vehicle. At first glance, it still looks like a regular sedan. But under the hood, they've installed a hybrid powertrain that contains both hydrogen and electric power sources. Even by the standards of the Department of Energy competition they're participating in, it's an outlier. That's exactly what they had in mind. "We didn't want to come here and tell them how to build a better Volt," said Tom Bradley, faculty adviser for the Colorado State team. "They already know how to do that. We can tell them how to think about these possibilities in a whole new way." After three years of work, it all comes down to this. The Colorado State team was one of 15 that came to GM's Milford Proving Grounds last week for the final stretch of the EcoCar2 competition, which challenges regular college students who have no automotive experience to do nothing less than reinvent the American car. The teams have come from across North America, and include schools like Ohio State and Virginia Tech that have a long history of participating in similar competitions, and schools like the University of Washington and Embry-Riddle Aeronautical University that are here for the first time. After three years of work, it all comes down to this. The teams have operated 24 hours a day for almost two weeks here at the Proving Grounds, running a gamut of tests that include a 310-point safety inspection, emissions and energy-consumption tests and road tests, in which professional GM drivers ensure they're road worthy. The winning team will be announced tonight in Washington D.C. Revolutionary cars, ordinary package While other green-car competitions encourage extreme designs, this one comes with a somewhat constraining twist: Yes, students must improve fuel economy and reduce emissions, but in the end, they still have to have a car that would appeal to mainstream customers. In practical terms, that means they must keep conveniences like air conditioning and trunk space.

2020 Chevy Trax and Buick Encore spied testing

We just recently saw a little crossover SUV from General Motors being tested, and we weren't positive what brand it belonged to. We narrowed it down to Chevy or GMC, but we're feeling more confident that it's a GMC now, since both the next generation Chevy Trax and Buick Encore subcompact crossover SUVs have been spied testing together. Of the two, the Chevy has the more radically different sheet metal. It ditches the somewhat frumpy, lumpy shape of the current Trax for a body inspired by the bigger Chevy Blazer. The roofline has sharp corners, and the hood is wide and flat. The front fascia, though obscured, shows the most connection to the bigger crossover. It has the same split headlight configuration, and it looks as though the grille takes up a sizable section of the fascia. View 7 Photos The Buick Encore on the other hand looks evolutionary in design. The body still has plenty of curves, and the distinctive, sharply rising window sill are all hallmarks of the current Encore design. The headlights and grille are similar, too, though the grille appears to be slightly updated to fit in with the Enclave and Regal. It's understandable that Buick might want to play it safe with the new Encore, since the model is Buick's best seller, selling about 23,000 units in the last quarter, nearly twice that of the next best performer, the Enclave. Since this is the first time we've seen these little crossovers, we expect it will still be a year or two before we get to see them fully revealed. They will probably continue to use small-displacement turbocharged four-cylinder engines with either front- or all-wheel drive. Related Video: