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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.

U.S. new-vehicle sales in 2018 rise slightly to 17.27 million [UPDATE]

DETROIT — Sales of new vehicles in the U.S. rose slightly in 2018, defying predictions and highlighting a strong economy. Automakers reported an increase of 0.3 percent over a year ago to 17.27 million vehicles. The increase came despite rising interest rates, a volatile stock market, and rising car and truck prices that pushed some buyers out of the new-vehicle market. Industry analysts and automakers said strong economic fundamentals pushed up sales and should keep them near historic highs in 2019. "Economic conditions in the U.S. are favorable and should continue to be supportive of vehicle sales at or around their current run rate," Ford Chief Economist Emily Kolinski Morris said after the company and other automakers announced their sales numbers Thursday. That auto sales remain near the 2016 record of 17.55 million is a testimonial to the strength of the economy, said Mark Zandi, chief economist at Moody's Analytics. The job market, he said, has created new employment, and wage growth has accelerated. "That's fundamental to selling anything," he said. "If there are lots of jobs and people are getting bigger paychecks, they will buy more." The unemployment rate is 3.7 percent, a 49-year low. The economy is thought to have grown close to 3 percent last year, its best performance in more than a decade. Consumers, the main driver of the economy, are spending freely. The Federal Reserve raised its key interest rate four times in 2018 but is only expected to raise it twice this year. Auto sales also were helped by low gasoline prices and rising home values, Zandi said. It all means that people are likely to keep buying new vehicles this year even as they grow more expensive. The Edmunds.com auto-pricing site estimates that the average new vehicle price hit a record $35,957 in December, about 2 percent higher than the previous year. It will be harder for automakers to keep the sales pace above 17 million because they have been enticing buyers for several years now with low-interest financing and other incentives, Zandi said. He predicts more deals in the coming year as job growth slows and credit tightens for higher-risk buyers. Edmunds, which provides content, including automotive tips and reviews, for distribution by The Associated Press, predicts that sales will drop this year to 16.9 million.

Cadillac issues stop sale on ATS to recall 82k units

Cadillac is issuing a recall on 82,620 examples of the 2013-2016 ATS worldwide to fix a compliance issue with the sunroof controls. Until a service bulletin goes out to take care of things, there's also a stop sale on the luxury compact in the United States, The Detroit News reports. Of the affected models, 63,665 are in the US, according to a statement sent to Autoblog, and 7,922 of them are in Canada. The problem is actually the same issue as a recall on nearly 59,000 examples of the 2013-2015 ATS in the US in February. In them, the controls for the tilt and slide of the roof aren't recessed enough to meet government standards for the force necessary to operate the buttons. The Feds believe that someone could accidentally activate the auto-close and potentially be at risk. At the time, Cadillac dealers installed a new trim plate to add the needed clearance. In the latest update, the company is adding the 2016 model year, and according to The Detroit News, 70 percent of the cars from the original campaign also need another new trim plate. Unsurprisingly for such a minor defect, there are no known crashes, injuries, fatalities, or customer complaints related to this issue, according to the announcement by General Motors. Cadillac ATS Statement: General Motors is recalling 63,665 Cadillac ATS sedans in the United States from the 2013-2016 model years because the power-operated roof panel systems on these vehicles will auto-close when the non-recessed portion of the "Slide" or "Tilt" switches are pressed and the roof panel is open. Because these switches are not fully recessed, they can be actuated with less force than required to comply with applicable federal standards. GM knows of no crashes, injuries or fatalities related to this issue and has received no customer complaints. The total population of the recall including Canada, Mexico and exports is 82,620. Transport Canada Recall # 2015322 Recall Date 2015/07/21 Notification Type Compliance Mfr System Electrical Manufacturer Recall Number 15568 Units Affected The number of vehicles or components affected by the recall. 7,922 Category Car Recall Details Certain vehicles equipped with power-operated sunroof system may fail to conform to Canada Motor Vehicle Safety Standard (CMVSS) 118 - Power-Operated Window, Partition and Roof Panel Systems.