GM Earnings Rise 1% as Buyers Pay More Silverado Trucks

General Motors said Thursday that higher prices for Silverado 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 the 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.

Silverado 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.

CEO Mary Barra told analysts on a conference call Thursday that the company is hiring white-collar workers with skills in growth areas. For example, GM is in the process of adding 500 workers for automated vehicles at Cruise, raising the workforce to 2,000.

Many of the white-collar layoffs came from work on the internal combustion engine, and administration.

“We are hiring now to replace attrition but maintain the lower cost level that we’ve worked so hard to get,” Barra said.

GM repeated its guidance for the full-year adjusted pretax income of $6.50 to $7 per share. Shares rose almost 3 percent in midday trading Thursday.

source: usa.inquirer.net

GM unveils Bolt electric car in Vegas

LAS VEGAS, United States—General Motors on Wednesday unveiled the production version of its Chevrolet Bolt electric car, on which the US auto giant is pinning its hopes for the emerging segment.

The Bolt aims to appeal to consumers looking at a more affordable price tag than the luxury, market-leading Tesla.

“It’s more than a car, it’s a platform that can be upgraded,” said GM chairman and chief executive Mary Barra, speaking at the Consumer Electronics Show in Las Vegas.

“Who are our customers? Anyone who wants to save time, money and the environment in a car that is truly fun to drive.”

The Bolt, set to go into production later this year, is designed to travel 320 kilometers (more than 200 miles) between charges.

It also features some of the connected technology found on rival vehicles including a Wi-Fi hotspot offering access to apps and services.

The price tag is expected to be in the range of $30,000 after government tax incentives, which is less than half the price of the current Tesla models on the market.

“The Bolt EV is truly the first EV that cracks the code of long range and affordable price,” Barra said.

The new GM car will be compatible with various connected platforms such as Apple CarPlay and Google’s Android Auto.

Bolt will also feature its own dedicated smartphone app, which will manage vehicle information and functions, such as charge status, maintenance and navigation.

The app will include a “gamification” feature that allows owners to “compete” by comparing driving styles to determine who is driving most efficiently.

The Bolt also includes a rear camera connected to the interior rear-view mirror, enabling drivers to see behind them even if their view is blocked by passengers.

Barra said the Bolt is the next step for GM toward more autonomous vehicles, and possibly new ownership models such as car sharing, two concepts other auto manufacturers are also eyeing.

“Down the road, the connectivity… will one day help us offer other technologies and transportation solutions that customers will demand,” she said.

“Everything from car-sharing apps to ownership models and automated driving, and one day self-driving cars.”

source: business.inquirer.net

Auto experts: Top managers probably knew of Volkswagen cheating

DETROIT — Auto industry insiders strongly suspect the emissions cheating scandal at Volkswagen is much wider and reaches higher up the corporate ladder than the company is letting on.

Volkswagen’s new CEO, Matthias Mueller, was quoted Wednesday as telling a German newspaper that the investigation so far has found that a few software developers tampered with the pollution controls on some of VW’s diesel engines. He said top executives would not have gotten involved in the software.

But industry experts and analysts say it’s hard to believe a few designers acted on their own to blatantly circumvent US emissions tests.

“You know that simple software guys would never have the courage or the authority to initiate the cheating,” said retired General Motors vice chairman Bob Lutz. “They would want someone senior to sign off on it.”

VW has admitted that 11 million of its diesel cars worldwide have software that turns pollution controls on when the vehicles are being tested on a treadmill-like device and shuts them off when the automobiles are on the road. The trick enables the cars to get better fuel mileage while spewing illegal levels of smog-causing exhaust.

Mueller didn’t rule out a wider circle of offenders and said VW is “now clarifying the responsibilities in detail.” The automaker has suspended four people responsible for engine development and hired a law firm to investigate.

On Thursday, VW’s top US executive, Michael Horn, is likely to face tough questioning on Capitol Hill about what he knew and when he knew it. VW said he will testify before Congress that he found out about the cheating software only a few weeks ago.

Experts say others in the company had to know about the cheating because the software controlled devices engineered by other departments. Those departments would surely have seen something amiss during testing of their own equipment.

Also, the cheating lasted for seven or eight years, and during that time, engineers and department heads would have changed jobs, widening the circle of knowledge, said Karl Brauer, senior analyst at Kelley Blue Book.

“I cannot envision how an eight-year policy to design the computers to act this way would be known by a few people at a low level and nobody else,” he said.

The cheating came as VW was aspiring to become the world’s top-selling automaker. Former employees said engineers were under pressure from management at the time to fix a problem that prevented VW from selling certain diesels in the US

“They don’t take no for an answer,” said one former employee who spoke on condition of anonymity for fear of retribution from the VW.

Also, when some of the emissions violations were brought to VW’s attention by regulators in the US in 2014, the automaker disputed the findings and questioned the test results, fighting the Environmental Protection Agency for more than a year.

“Someone had to approve it initially and keep approving it for seven or eight years, and then start lying about it more when it was discovered,” Brauer said.

A VW spokesman in the US wouldn’t comment Wednesday on the analysts’ statements.

Mueller also said in the interview in the daily Frankfurter Allgemeine Zeitung that a recall of 2.8 million cars with the software could start in Germany in January. That wouldn’t include cars in the US, where any fix still must be approved by the EPA and California regulators.

He said many of the cars being recalled won’t need much fixing, merely an adjustment to the software. Others, though, may require mechanical fixes such as new injectors or catalyzers.

“All the cars should be in order by the end of 2016,” he added.

He also said not all 11 million cars will need to be recalled.

Mueller, who became CEO less than two weeks ago when Martin Winterkorn resigned over the scandal, said the cars have different transmissions and country-specific designs. “So we don’t need three solutions, but thousands,” he said.

source: business.inquirer.net

GM recalls 3 million more cars worldwide

General Motors has announced the recall of nearly three million vehicles worldwide, with most of the cars, 2.71 million, in the United States. GM says that five recalls affect 2.99 million vehicles.

The recalls cover:

    -2,440,524 previous generation passenger cars for taillamp malfunctions
    -103,158 previous generation Chevrolet Corvettes for loss of low-beam head lamps
    -140,067 Chevrolet Malibus from the 2014 model year for hydraulic brake booster malfunctions
    -19,225 Cadillac CTS 2013-2014 models for windshield wiper failures
    -477 full-size trucks from the 2014 and 2015 model years for a tie-rod defect that can lead to a crash

The largest recall involves 2004-2012 Chevrolet Malibu, 2004-2007 Chevrolet Malibu Maxx, 2005-2010 Pontiac G6 and 2007-2010 Saturn Auras model cars in U.S. to modify the brake lamp wiring harness.

Affected vehicles could have corrosion develop in the wiring harness for the body control module due to micro-vibration. The condition could result in brake lamps failing to illuminate when the brakes are applied or brake lamps illuminating when the brakes are not engaged.  Additionally, cruise control, traction control, electronic stability control and panic braking assist operation could be disabled.

GM is aware of several hundred complaints, 13 crashes and two injuries but no fatalities as a result of the condition. The company issued a technical service bulletin in 2008 and conducted a safety campaign for a small population of 2005 model year vehicles in January 2009.

The second safety recall covers 111,889 Chevrolet Corvettes from the 2005-2007 model years for potential loss of low-beam headlamp operation Models from 2008-2013 will be covered under a Customer Satisfaction Program. All repairs will be at no cost to customers.

When the engine is warm, the underhood electrical center housing could expand, causing the headlamp low-beam relay control circuit wire to bend slightly. After the wire is repeatedly bent, it can fracture and separate. When this occurs, the low-beam headlamps will not illuminate. As the housing cools and contracts, the low-beam headlamp function may return. This condition does not affect the high-beam headlamps, marker lamps, turn signals, daytime running lamps or fog lamps. Loss of low beam headlamps when they are required could reduce the driver’s visibility, increasing the risk of a crash.

GM is aware of several hundred complaints as result of the condition but no crashes, injuries or fatalities.

The third recall covers 140,067 Chevrolet Malibus from the 2014 model year with 2.5L engines and stop/start technology. These vehicles are subject to the disabling of hydraulic brake boost that can require greater pedal efforts and extended stopping distances. Dealers will reprogram the electronic brake control module. The issue was discovered in testing of a future model with similar technology. GM is aware of four crashes but it is not clear that these are related to the condition. No injuries are known from those crashes.

The fourth recall covers 19,225 Cadillac CTS from the 2013-2014 model year for a condition in which the windshield wiper system may become inoperable after a vehicle jump start with wipers active and restricted, such as by ice and snow. Potential lack of visibility could increase the risk of a crash. Dealers will replace the front wiper module free of charge. GM is unaware of any crashes or injuries due to the condition.

The fifth recall involves certain 2014 Chevrolet Silverado and GMC Sierra light duty pickups and 2015 model year Chevrolet Tahoe SUVs. The tie rod threaded attachment to the steering gear rack in these vehicles may not be tightened to specification. With this condition, the tie rod can separate from the steering rack and a crash could occur without prior warning. Customers are being contacted and told to have their vehicles taken by flatbed to their dealer, where the inner tie rods will be inspected for correct torque, and, if necessary, the steering gear will be replaced. The repair procedure was being sent to dealers and owner letters sent by overnight mail to customers on May 14. The issue was discovered and corrected during assembly after the small number of vehicles was released.

GM expects to take a charge of up to approximately $200 million in the second quarter, primarily for the cost of recall-related repairs announced in the quarter.

The new recalls came as the largest US automaker faces numerous lawsuits and government and congressional investigations following a delayed recall of millions of cars for faulty ignition switches linked to 13 deaths.

The ignition problem was detected at the pre-production stage as early as 2001, but the company waited until February this year to begin recalling the affected vehicles.

GM’s chief executive Mary Barra, who took the company’s job in January, has pledged to aggressively address the automaker’s safety and quality problems.

The costs of the multiple recalls are piling up. In the first quarter, GM took a $1.3 billion charge that included a $700 million expense for the 2.6 million cars recalled worldwide for faulty ignition switches and ignition cylinders.

Other recalls, totaling 4.5 million vehicles, cost $600 million.

source: motioncars.inquirer.net

GM recalling 57,131 SUVs for defective fuel gauges

DETROIT—General Motors is recalling 57,131 SUVs because the fuel gauges may show inaccurate readings.

The recall involves the Buick Enclave, Chevrolet Traverse and GMC Acadia from the 2014 model year. All of the affected SUVs were built between March 26 and Aug. 15 of 2013.

GM says the engine control module software may cause the fuel gauge to read inaccurately. If that happens, the vehicle might run out of fuel and stall without warning.

The company doesn’t know of any crashes or injuries related to the problem.

GM says dealers will reprogram the software for free, starting immediately.

The recall includes 3,275 SUVs exported to various countries, in addition to those sold in Canada and Mexico.

The recall was posted Saturday on the National Highway Traffic Safety Administration’s Web site.

source: business.inquirer.net

Cadillac introduces 2015 Escalade SUV

Cadillac introduced the all-new 2015 Escalade, a sophisticated luxury SUV designed to establish new benchmarks for hand-tailored craftsmanship and technology. The fourth-generation Escalade is an entirely new design yet instantly recognizable. Much of the story of Cadillac’s redesigned flagship SUV is on the interior, where new levels of luxury combine with the latest technology.




Production of the 2015 Escalade begins next spring in Arlington, Texas. The product line will consist of the standard Escalade model, as well as the extended-length ESV edition, with offers a 14-inch-longer (355 mm) wheelbase and approximately 20 inches (508 mm) more in overall length, maximizing space for third-row passengers and 60 percent more cargo space behind the third-row seat than the Escalade.

Offered with 2WD and 4WD drivetrains, Escalade features a new 6.2L V-8 engine that is more powerful and more efficient than previous models. Cadillac’s Magnetic Ride Control, the world’s fastest-reacting suspension system, is now standard and delivers precisely controlled driving performance.

The exterior features crisp, new and more sophisticated surfaces, accented by dramatic light-emitting diode, or LED, lighting.




The new interior features cut-and-sewn and wrapped materials, with wood trim options chosen for elegance and authenticity. Seats were engineered to be more comfortable and sculpted in appearance. The new interior is dramatically quieter, too, thanks to a stronger new body structure, new and enhanced acoustic material, and Bose Active Noise Cancellation technology.

CUE, Cadillac’s advanced system for connectivity and control, is standard featuring state-of-the-art voice recognition with touch controls common with the world’s most popular tablets and mobile devices. A standard 12.3-inch digital gauge cluster can be reconfigured with four themes and an available head-up display projects information onto the windshield. An available Blu-Ray DVD rear entertainment system includes a nine-inch, roof-mounted screen on Escalade and two nine-inch screens on Escalade ESV.


The front seating area offers more than 1.5 inches (44 mm) more headroom and more than four inches (101 mm) of additional legroom compared to previous models while the second- and third-row seats fold flat for greater cargo versatility – and a segment-first hands-free liftgate includes programmable height settings.

Escalade’s new technologies include safety features to help protect occupants before, during and after a collision, such as Front and Rear Automatic Braking, which relies on short-range radar technology and ultrasonic sensors to help the driver avoid front and rear low-speed collisions via a progression of alerts that extend to complete braking, if necessary.



Also new is the segment’s only Front Seat Center-Mounted air bag, which is engineered to provide additional protection to drivers and front passengers in far-side impact crashes, where the affected occupant is on the opposite, non-struck side of the vehicle.

A Driver Awareness package includes Forward Collision Alert, Lane Departure Warning System, and the patented Safety Alert Seat, which offers directional vibrations to alert the driver about potential crash threats. A Driver Assist package adds Full Speed Range Adaptive Cruise Control, Front and Rear Automatic Braking, Automatic Collision Preparation and Automatic Safety Belt Tightening.

Additionally, Side Blind Zone Alert, Rear Cross Traffic Alert and Lane Change Alert are standard on Luxury and Premium models.


Performance and driving experience
The performance threshold for the 2015 Escalade lineup rises with an all-new, more efficient 6.2L V-8 engine rated at an SAE-certified 420 horsepower (313 kW) and 460 lb-ft of torque (623 Nm) – a nearly 5-percent increase in horsepower and 10 percent more torque. The greater torque delivers an enhanced feeling of power on demand, particularly from a standstill and at low speeds.

The new 6.2L features state-of-the-art technologies, including direct injection, Active Fuel Management, or cylinder deactivation, continuously variable valve timing and an advanced combustion system, designed to make the most of power, torque and efficiency across a broad range of operating conditions. More precisely controlled combustion enables Escalade to run with a higher compression ratio, which delivers greater power and greater expected efficiency.

The engine is matched with the Hydra-Matic 6L80 six-speed automatic transmission with enhanced TapShift control.

source: motioncars.inquirer.net