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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.

Junkyard Gem: 1985 Chevrolet Sprint

For in the 1985 model year, General Motors began selling Chevrolet-badged Suzuki Cultus hatchbacks in California. Sales of the cheap three-cylinder econobox in the rest of North America followed soon after (with the Canadian version known as the Pontiac Firefly), and did pretty well considering the crash in gasoline prices during the middle 1980s. Starting in 1988, the facelifted Sprint became the Geo (and, later on, Chevrolet) Metro. Here's one of the very first Cultuses sold on our shores, found in a San Francisco Bay Area car graveyard. Amazingly, the primitive rear-wheel-drive Chevrolet Chevette remained available all the way through 1987, competing with the thriftier front-wheel-drive Sprint in the same showrooms. For 1988, Pontiac started selling a rebadged Daewoo LeMans, so the Sprint/Metro never lacked for intra-corporate competition. Inside, you'll find the same stuff most mid-1980s Japanese econoboxes got: tough cloth upholstery and long-wearing hard plastics. Suzuki quality in 1985 wasn't quite up to Honda or Toyota levels, but you weren't paying Honda or Toyota prices for the Sprint. MSRP on this car started at $4,949, or about $12,000 in 2020 dollars. The cheapest possible 1985 Chevette cost $5,340, while a new no-frills Ford Escort would set you back $5,620. Subaru, however, could have put you in a punitively unappointed base-model Leone hatchback for just 40 bucks more than the Sprint that year. I think I'd have sprung the extra for a $5,348 Toyota Tercel, a $5,195 Mazda GLC, or— best cheap-commuter deal of all that year— the $5,399 Honda Civic 1300 hatchback. I was 19 years old and driving a Competition Orange 1968 Mercury Cyclone that year, and I recall feeling pity for Chevy Sprint drivers, new-car smell or not. Still, these weren't bad cars for the price, though a Sprint with an automatic transmission was a real character-builder. Got three cylinders and uses 'em all! 48 horsepower from this hemi-headed SOHC 1-liter. The Turbo Sprint — yes, such a car existed — had a howling 70 horsepower. The hood-latch release is a rectangular button that resembles a badge. 1985 Chevy Sprint Commercial The highest-mileage, lowest-priced car you can buy. 1985 holden barina commercial The Australian-market version was the Holden Barina, and the TV ads featured the Road Runner. 1983 SUZUKI CULTUS Ad In its homeland, this car got screaming guitars and a drive through New York City for its TV commercials.

General Motors CEO Provides Few Details In Appearance Before Congress

It was only two months ago that Mary Barra, freshly crowned as the new General Motors chief executive officer, visited Washington DC as an esteemed guest of First Lady Michelle Obama for the State of the Union address. On Tuesday, Barra returned to the Capitol under more strained circumstances. For more than two contentious hours, she took questions from members of a House of Representatives subcommittee investigating General Motors years-long delay in initiating a recall of millions of vehicles that contained a defect that has killed at least 13 people. Why did GM accept faulty ignition switches that were below the company's set specfications? Why did GM learn about the problem in 2001 yet take no action until 2014? Will GM compensate victims' families even though the company's bankruptcy may limit its liability? Those were a few of the questions members of the House Oversight and Investigations Subcommittee asked. Few concrete answers were forthcoming. For her part, Barra sidestepped most of the questions, saying she wouldn't have information needed to answer them until an internal review is completed. David Friedman, the administrator of the National Highway Traffic Safety Administration, testified after Barra. The biggest news that emerged from the hearing was that General Motors has retained attorney Kenneth Feinberg to advise the company on its civil and legal responsibilities. He has made a career of resolving disputes and serving in a 'fixer' role, serving as the chief of the federal government's September 11th Victim Compensation Fund, as an administrator of compensation fund for victims of the BP Deepwater Horizon disaster and a similar fund for victims of the Boston Marathon bombing. Barra, who has been GM's CEO since January but been with the company since 1980, expects to meet with Feinberg on Friday, and have a concrete plan within the next 30-60 days. Yet Barra would not say for certain Tuesday that GM would compensate the victims at all. Despite repeated questions from Rep. Diana DeGette (D-Colo.), Barra did not outline the company's intentions. "I assume GM is hiring (Feinberg) to help identify the size of claims and then compensate the victims? Is that right," DeGette asked. "Is GM willing to put together some kind of a compensation fund for these victims that Mr. Feinberg will then administer?" "We've hired him to help assess the situation," Barra replied. "So really, there's no money involved at this point," DeGette asked.