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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.

Can DARPA hack into a Chevy Impala through OnStar?

An ex-video game wizard named Dan Kaufman tracked a circuitous route to becoming the head of the Software Innovation Division at the Defense Advanced Research Projects Agency. DARPA normally makes these pages because of its work with autonomous vehicles and automobile technology that overlaps with military applications, but for the past five years Kaufman and his multiple research teams have been working on creating unhackable software code that could be used in military drones. Part of that work has involved hacking into just about everything else, and as a segment on 60 Minutes reveals, that includes cars. The masterminds discovered a way to hack into OnStar, the General Motors telematics system. After figuring out how to hook into OnStar's emergency communication system, they overwhelmed it with data. While the computer was busy trying to manage the overrun of data, the research team inserted code that took control of the sedan's other computers, giving it control. So while reporter Leslie Stahl tooled around in a parking lot, a DARPA researcher with a laptop would occasionally take control of the car, like by applying its brakes or, conversely, removing the ability for Stahl to use the brakes. Hacking into vehicles has been in the news for years: Car and Driver ran a feature on the various ways cars could be hacked in 2011, two hackers released a car-hacking code at the hacker-fest Defcon in 2013 and demonstrated how it worked on a Toyota Prius and Ford Escape, and German researchers demonstrated how they could hack into BMW's Connected Drive remote-services system last week via an attack on the cars' telematics units. This isn't about GM or Onstar or the future; hacking into cars of all kinds isn't coming, it's here, and it doesn't take the half-billion-dollar annual budget of a small DARPA division to do it. Check out the 60 Minutes video on the CBS site (you can watch the entire video from a mobile device without logging in). The OnStar hacking starts at 6:45, but it's worth watching what leads up to that. News Source: Jalopnik Chevrolet Safety Technology Infotainment Autonomous Vehicles Videos Sedan hacking 60 minutes

Cadillac CT6 production ceases January 2020 as part of D-Ham layoffs

General Motors filed paperwork under the Worker Adjustment and Retraining Notification Act with Michigan's Department of Labor and Economic Opportunity this week, detailing events to come at the automaker's Detroit-Hamtramck Assembly Plant. Starting February 28, 814 salaried and hourly workers at D-Ham, as its called, will be laid off. The 753 workers represented by the UAW will begin receiving offers in January to relocate to facilities in Michigan and Ohio, or buyout offers. As the 4-million-square-foot plant winds down through April 3 to a skeleton crew, the Cadillac CT6 ceases production in January 2020, and the last Chevrolet Impala comes off the line on February 28. The loss of the CT6 represents the end of Cadillac's latest brief, and highly regarded, adventure into flagship sedans. It might also mean the end of the 4.2-liter Blackwing twin-turbo V8 engine, at least for the moment. Both casualties are calamities. The death of the Impala closes the door on a nameplate in production for 52 years since 1957, having started off as a top-tier trim for the 1958 Bel Air known as the Bel Air Impala, once advertised with the line, "Lets you know you're the boss." As part of the new four-year labor agreement with the UAW, GM is keeping D-Ham open to build a new line of battery-electric vehicles, ultimately investing $3 billion and tripling employment to 2,225 workers when fully operational. The agreement described the coming EV as a "van" that would commence production in late 2021, but various reports say what's actually coming is a range of premium EVs in pickup and SUV bodystyles under the program codename BT1. The easy predictions put an electric GMC Sierra and Cadillac Escalade among the EV fold, but not until 2023, according to auto industry forecaster LMC Automotive. Before that, LMC claims an electric van will debut in late 2021, along with a battery-powered rebirth of the Hummer brand in pickup and SUV forms, also in late 2021.