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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 to build outgoing Silverado and Sierra until late 2019

As it has done with previous generations, General Motors is keeping the outgoing versions of its 1500 pickups in production despite the arrival of the all-new 2019 Chevrolet Silverado and 2019 GMC Sierra. The production of the previous, K2 generation models will begin to be wound down gradually, according to Automotive News, starting with crew cabs "early next year," and double and regular cab models following during "the early second half of next year." The old model trucks will continue to be built into "late 2019" based on market demand, GM's spokesperson Kim Carpenter said. The Chevrolet will go by the name Silverado LD, with the GMC Sierra designation still to be announced. Some of the outgoing models are built by sharing the assembly work between two GM plants. Partially finished Silverado and Sierra double cab bodies are shipped from Fort Wayne, Ind., to Oshawa, Ont., where the trucks are completed, including receiving paint. This eases the workload in Fort Wayne, where production of the new T1 generation trucks started in July 2018. In January, the Silao plant in Mexico will take on the duties of building new generation regular cab and crew cab trucks. Carpenter also said that the "Oshawa shuttle," as the shared production is called, has been very successful. As a result, 60,000 more trucks will be built than what the original production forecast initially called for. GM's latest quarterly profits, disclosed last week to be $1 billion, have been far higher than expected and will result in full-year profits far higher than what had been predicted in light of steel tariffs. GM isn't the only truck maker taking a similar multi-generation approach for 2019. Both the outgoing and redesigned Ram 1500 are in production, with the previous generation being dubbed Ram 1500 Classic. Related Video:

GM Design shows what could have been and what might be

We periodically like to check in with GM Design's Instagram account to see what they're cooking up. Even better is when we catch a glimpse of an alternate history of what legendary designers from The General's past were thinking, though those ideas may not have made it into production. This week, for example, the account posted some illustrations from George Camp, whose career at GM spanned nearly four decades, from 1963 to 2001. One of the renderings is of what appears to be a 1971-72 Pontiac GTO Judge, but with two headlights instead of the production unit's quad beams. The rear departs from the canonical version most dramatically, with a massive integrated wing. Other bits that didn't make the production cut include large side vents, a gill-like side marker and rectangular intakes below the headlights that wouldn't be out of place on a modern design today. Amazingly, from what we can make out of the date, it appears that the drawing was done sometime in 1965, which makes it quite prescient.           View this post on Instagram                       A post shared by GM Design (@generalmotorsdesign) There's also a very aerodynamic interpretation of a Corvette ZR-1. To our eyes it splits the difference between the 1986 Corvette Indy concept and a fourth-generation F-body Pontiac Firebird, so perhaps parts of Camp's work on this sketch did make it into physical form. There's also a radical sports car concept from May 1970 that resembles the Mazda RX-500 concept from the same year, a Syd Mead-looking Cadillac coupe, and an Oldsmobile with a cool take on the company's trademark waterfall grille and elements of the Colonnade Cutlass at the rear. Other recent posts include a FJ Cruiser-like off-road EV, a sleek coupe with the Chevy corporate grille, and a rendering of a Silverado-esque pickup that looks far better than the current production version.           View this post on Instagram                       A post shared by GM Design (@generalmotorsdesign) It's pretty easy to lose hours in the account, but it's always fascinating to see GM's visions of what could have been and what might be. Related Video: