GM CEO Barra Confirms Electric Pickups Are Coming
Leadership in trucks and electric vehicles is a top priority.
General Motors will have a complete line of electric vehicles and that includes pickup trucks, CEO Mary Barra confirmed today.
GM will not cede leadership in trucks or electric vehicles, Barra told investors on a call to discuss first-quarter earnings.
Barra said further details on the development of its electric trucks will come later, but she wanted to clear the air and assert GM's standing as a leader in these segments. The comments come as Ford has said it is working on an electric pickup of its own and has invested $500 million in electric vehicle startup Rivian. Ford will use Rivian's "skateboard" platform to make an undisclosed vehicle. Rivian has shown an electric pickup and an electric SUV to the public so far. Prior to the Ford announcement, GM was in talks with Rivian, but they broke off. Tesla also is working on an electric pickup.
Large trucks and SUVs are key to GM's earnings. The automaker reported net earnings of $2.5 billion for the quarter, more than doubling results from a year ago, but revenue declined 3.4 percent in part due to downtime in full-size pickup truck production to launch the new Chevrolet Silverado and GMC Sierra. But with the launch done, GM is reaping profits from the large truck sales and launching its 2020 heavy-duty pickups.
Capacity was increased for this generation of full-size pickups, allowing GM to build more of the popular crew cab models, Barra said. It is paying off with average transaction prices that are $5,800 higher. Other cab configurations and powertrains are being added now to offer lower trim levels and work trucks. "We are selling every truck we build," she said.
Heavy-duty pickup sales will be flat this year. The plant in Flint, Michigan, was down for retooling last year, and more downtime is planned for this quarter as part of the launch of the new lineup.
Chief Financial Officer Dhivya Suryadevara said trucks represent an opportunity to increase revenue by $2 billion.
There will also be downtime at the plant in Arlington, Texas, to prepare to launch the next generation of full-size SUVs. A production loss of 23,000 vehicles in the first quarter caused a financial hit given how profitable they are. Suryadevara said there could be another 25,000 units of lost production this quarter.
Restructuring, which includes the idling of five plants in North America and a 15 percent reduction of the salaried workforce, has saved the company $400 million and will reduce costs by $4.5 billion by the end of 2020. Barra said 1,300 of the 2,800 workers impacted by plant closings have accepted transfers to other facilities.
The automaker spent $200 million on its Cruise autonomous vehicle operations in the first quarter and that figure will grow to $1 billion this year. Barra said 1,000 people will be hired, doubling the workforce. GM financials also benefited from the higher valuation of its shares in Lyft.
Restructuring of operations in Korea is also paying off but sales are down in China, a market where GM plans to introduce at least 20 new or updated models this year.