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GM outlook darkens as profits fall on steel costs

Michael Wayland, Automotive News  /  July 25, 2018

DETROIT -- General Motors lowered its earnings forecast for the year following a second-quarter profit decline due indirectly to the Trump administration's tariffs on steel and aluminum.

Although GM sources around 90 percent of its steel and most of its aluminum domestically, the 25 percent tariff on steel and 10 percent tariff on aluminum are still expected to have a significant impact on the automaker's costs.

GM expects the cost increases to have a $1 billion impact on its business operations this year, up from an earlier estimate of about $500 million.

The automaker on Wednesday said earnings before interest and taxes dropped 13 percent to $3.2 billion compared with a year earlier. Net income from continuing operations, which exclude the sale of its European operations last year, fell 2.8 percent to $2.39 billion.

Revenue for the second quarter fell less than 1 percent to $36.8 billion.

GM CFO Chuck Stevens said the automaker’s North American operations absorbed most of the cost increases for steel and aluminum.

“We’ve got some work to do the rest of the year there,” he said.

GM lowered its guidance on free cash flow for the year from the mid-$5 billion range to $4 billion and its earnings per share -- a key estimate for Wall Street -- to about $6 from the $6.30-$6.60 range. GM also lowered its North American profit margin expectations to 9-10 percent from 10 percent.

Other factors impacting the automaker’s earnings for the second quarter included foreign currency devaluation -- particularly in South America -- and lower production of its full-size pickups due to plant changeover for GM’s next-gen Chevrolet Silverado and GMC Sierra.

The 2019 full-size pickups, Stevens said, are being shipped to dealers with first deliveries to customers expected in August -- on track with the company’s previously announced launch plans.

GM shares fell 5 percent in pre-market trading. 

Regions: North American earnings declined from $3.5 billion to $2.7 billion in the second quarter. Earnings for the company's international operations also declined, to $143 million from $317 million a year earlier.

Finance: GM Financial reported earnings of $536 million, up from $357 million a year earlier. Forty-five percent of GM’s U.S. sales in the quarter were financed through GM Financial.

Operating profit margin: Profit margin for the quarter was 8.7 percent, including a 9.4 percent margin for North America.

Expectations: GM beat Wall Street’s expectations for a 13th consecutive quarter. The company reported earnings per share of $1.81, above analysts' forecasts of $1.78 -- a key metric for how Wall Street judges the company.

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The problem isn't just the tariffs on imported materials, the domestic manufacturers are jacking up their prices as well. My uncle is a national sales manager for a large lift gate company and said that the U.S. steel manufacturers jacked up their rates when the tariffs were imposed since they don't have to compete with the lower priced import materials.

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I was talking to a friend yesterday who was pissed because his dealership told him combines were going up $30000 this year due to tariffs on steel. His bitch was there isn’t $30K worth the steel on it as it sits now. 

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GM brings back iconic 1960s Tripower name

Richard Truett, Automotive News  /  July 31, 2018

TRAVERSE CITY, Mich. -- For the first time since the mid-1960s, General Motors will use the Tripower name on an engine.

But today's Tripower setup -- due in the next-generation Chevrolet Silverado and GMC Sierra pickups -- means something very different than it did in 1966, the last time a Tripower engine was offered in such cars as the Pontiac GTO.

For the new 2.7-liter turbo four-cylinder engine designed specifically for GM's full-size trucks, Tripower will refer to a suite of technologies that boosts horsepower and fuel economy, explained Mike Anderson, executive director of global transmission and electrification hardware engineering. Speaking at the CAR Management Briefing Seminars on Tuesday, Anderson said the new Tripower will encompass:

  • Cylinder deactivation, which shuts off two of the four cylinders at light-load cruising speeds.

  • Active thermal management that can increase or decrease heat in various parts of the engine to speed warm-ups or reduce temperatures in order to keep the engine running longer in its most thermally efficient range.

  • Intake valve lift control, a system that reduces the length the intake valve opens at certain speeds, which helps improve fuel economy under certain drive conditions.

GM expects deliveries of the new engine to start after the new trucks are launched this year. It is rated at 310 hp, one of the highest ever for a regular production four-cylinder engine. The new engine also uses an electric water pump, and a new and more efficient turbocharger from BorgWarner.

The original Tripower setup referred to the use of three two-barrel carburetors sitting on top of Pontiac's V-8 engines, used in the automaker's high-performance muscle cars. The final version of Pontiac's Tripower engine, a 389-cubic-inch V-8 used in the 1966 GTO, made 360 hp.

The arrangement was a less expensive option than fuel injection.

Pontiac offered Tripower engines in 1957-66. Pontiac muscle cars with Tripower engines from that era are now highly coveted by collectors, and the Tripower name is one of GM's most revered.

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GM squeezes pounds and pennies to attack Ford's pickup profit machine

Joseph White, Reuters  /  August 9, 2018

Engineers for GM pickups took the Ford factory tour to scout F-150 production

FORT WAYNE, Indiana -- When General Motors engineers were developing the 2019 Chevrolet Silverado and GMC Sierra pickup trucks, some of them joined public tours of Ford Motor Co.’s Dearborn, Mich., factory to watch aluminum-bodied F-series trucks go down the assembly line.

The redesign of the Ford F-series trucks, launched in 2014, set a new standard for fuel economy and lightweight vehicle construction. But armed with stopwatches and trained eyes, the GM engineers believed they saw problems.

“They had a real hard time getting those doors to fit,” Tim Herrick, the executive chief engineer for GM truck programs told Reuters.

His team did more intelligence gathering. They bought and tore apart Ford F-series doors sold as repair parts. Their conclusion: GM could cut weight in its trucks for a lower cost using doors made of a combination of aluminum and high strength steel that could be thinner than standard steel, shaving off kilograms in the process.

These pounds and penny-based decisions will have major implications in the highest stakes game going in Detroit: dominance in the world’s most profitable vehicle market, the gasoline-fueled large pickup segment. What’s more, GM is banking on strong sales of overhauled 2019 Silverados and GMC Sierras to fund its push into automated, electric vehicles -- a business many investors see as the auto industry’s long term future.

The risks are high given the hits automakers have taken from U.S. President Donald Trump’s trade policies.

Rising aluminum prices spurred by Trump’s tariffs are driving up costs on the Ford’s F-series, while rising steel and aluminum prices drag on GM results. GM also has a significant risk should the United States, Mexico and Canada fail to agree on a new NAFTA trade deal, given GM trucks built at its Silao, Mexico, factory could face a 25 percent tariff if NAFTA collapses.

Interviews with GM executives and a tour at its factory here in northwest Indiana provide a detailed look inside GM’s plan for the most important vehicles in its global lineup.

These big pickups are everything Tesla Inc.’s Model 3 or a Chevy Bolt electric car is not.

The mostly steel body is bolted to the truck’s steel frame, rather than the one-piece body and frame electric vehicles. The majority of trucks will have a V-8 gasoline engine in front powering the rear wheels -- like the classic GM cars of the 1950s. Some Silverados will have new four-cylinder engines, but there is no electric or hybrid offering as of now. The new Silverado -- GM’s top-selling vehicle in the United States -- is a technology achievement of a different kind.

It is taller and has a longer wheelbase than its beefy predecessor, which can help it more easily meet federal fuel efficiency rules. But it is 450 pounds lighter, and its V-8 engine achieves 23 mpg on the highway, which rivals smaller SUVs and crossovers.

Big price, big profits

Wall Street investors give Tesla and its electric vehicles a higher value than GM’s shares. GM is betting that its core customers in the American heartland will keep paying premium prices -- 27 percent of GM trucks sell for more than $55,000 -- for these vehicles capable of hauling a trailer by day and substituting for a luxury sedan by night.

Large pickups generate at least $17,000 a vehicle in pre-tax profit for GM, the company has indicated in disclosures to investors. GM executives told Reuters that with the new trucks, GM will have a big cost advantage they can use to chop at Ford’s leading market share.

“We think we have thousands of dollars advantage (over Ford) just in the aluminum costs. It’s big,” said Herrick during a walk through the Fort Wayne plant, which began shipping the new Silverados and Sierras late last month.

He said GM plans to use its Silverado cost advantage to put more safety or entertainment technology in the trucks, fund programs such as a promised fleet of electric cars and return money to shareholders.

At Ford, truck marketing manager Todd Eckert said the company plans to stick to its game plan. For 41 years, the F-series trucks have been the best-selling single model line in the United States. For the first half of this year, the F-series line -- which ranges from the light-duty F-150 to medium duty commercial trucks -- has a 59,000 vehicle lead over the combined Chevrolet and GMC large pickups.

“There’s always been competition in this segment and there always will be,” Eckert said.

Ford’s purchasing director Hau Thai-Tang at an investor conference on Wednesday called the F-series pickup “one of our profit pillars,” and said Ford plans to increase the share of its 2018-2022 product development budget allocated to trucks and commercial vehicles to 29 percent from 24 percent in its prior 2015-2019 plan.

Ford said it cuts costs by recycling about 20 millions pounds of aluminum scrap every month in its operations, enough to build about 37,000 F-series bodies.

Light metal duel

For decades, Ford and GM matched each other’s moves closely and built trucks that were similar in design, technology and capability.

With the launch of GM’s new trucks, the rivals’ technology strategies have diverged.

Ford in 2014 launched a new generation of F-series trucks with all-aluminum body structures for its big pickup trucks, and challenged rivals to find a better way match the fuel efficiency and towing power achieved using the lightweight metal and turbo-charged, six-cylinder engines.

Rising pressure from the U.S. government to slash carbon dioxide emissions made Ford’s move look smart.

The debate within GM over whether to follow Ford’s aluminum strategy “was a really hotly contested item for us,” said Herrick. He recalled skeptical questions when he sought approval from GM’s board for the billions of dollars required to launch the new Silverados at three factories.

“Son, it really costs this much to build all those trucks?” the 58-year-old executive recalled being asked by a member of the board.

Herrick, and Global Product Development chief Mark Reuss, said the shareholders’ billions would be better spent on what they call a “multi-material” strategy.

The new Silverado and Sierra got close to the Ford truck’s weight using seven different grades of steel in the cab, aluminum hoods, door exterior panels and tailgates. Reuss pushed development of a novel carbon fiber plastic that will be molded to make load beds for certain high-priced GMC models -- and perhaps be used in different ways in future GM models, Reuss said.

Before GM’s direction was clear, a supplier to Ford sent Reuss a box of the rivets his competitor was using to fasten the F-series aluminum body panels together, anticipating he’d be ordering them, too.

“They’re still on my desk,” Reuss said in an interview.

The combination of weight reduction and engine technology produces a rear-wheel drive 2019 Silverado with a 5.3-liter V-8 and an eight-speed automatic transmission that averages 17 mpg in the city and 23 on the highway, with a combined rating of 19 mpg. Different versions of the truck get different mileage ratings.

A Ford F-150 with a 3.5-liter turbo six-cylinder and optional equipment that boosts the payload to about 3,230 pounds is rated at 17 mpg in the city, 21 on the highway and 19 combined, according to the government. An F-150 with a lighter payload rating of about 2,640 pounds is rated at 18 mpg city, and 25 mpg on the highway, according to the government. Chevrolet claims a payload of 2,190 pounds for a 2019 Silverado with a 5.3-liter engine and an eight-speed transmission.

Four doors for profit

In some crucial ways, GM is following Ford.

GM previously could not keep pace with demand for crew cab pickups -- models with four, sedan-style doors in the cab. Ford used its lead in crew cab design to develop luxury truck models, such as the F-450 Limited, that have sticker prices as high as $100,000.

Average selling prices in the segment are around $42,000 to $45,000 -- higher than the industry average.

GM has now dedicated two factories to building light duty pickups, in Fort Wayne and Silao, Mexico, which have the flexibility to build “darn near 100 percent crew cabs if we wanted,” Herrick said.

The GMC marketing division, meanwhile, is putting more emphasis on its Denali luxury truck brand, while Chevrolet will market more luxurious versions of the Silverado such as the frontier-themed High Country, which has leather seats and a Bose sound system. GM executives said they want to increase the company’s share of trucks sold at prices above $55,000 from the current 27 percent.

John Bergstrom, who owns a multi-brand network of dealerships based in Neenah, Wis., said the new GM trucks should pull in buyers who currently don’t drive a pickup.

“We didn’t have the technology we needed,” Bergstrom said. With the new truck, “we’ve got that. They almost magically figured out how to get fuel economy out of these things.”

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No joke, poor fitting doors are a major customer complaint on all the F series trucks now.  Not sure why, are they dimensionally unstable coming out of the stamping dies or do they bend easily?  

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The best look yet at Chevy's mid-engine Corvette

Michael Wayland, Automotive News  /  August 10, 2018

A racing version of the next-generation mid-engine Chevrolet Corvette has broken cover, providing the best look yet at what the production version of the sports car will look like.

The race car, reportedly called the C8.R, was caught testing at Road America in Elkhart Lake, Wis., after the IMSA WeatherTech SportsCar Championship there.

Unlike previous spy shots of the production model, the racer has no heavy camouflage. The race car is expected to share similar characteristics with its production counterpart.

Overall, the vehicle retains front-end characteristics of recent Corvettes, while adding a much more sculpted and sleek appearance thanks to the midengine layout, including the rear of the car. (The spoiler on the production model is expected to be smaller, though.)

While GM has not confirmed plans for a mid-engine Corvette, the long-rumored and highly anticipated car is expected to arrive in the next year or so as a 2020 model. It is expected to be produced alongside the C7 until 2022, when the current generation will complete its life cycle.

Based on audio of the C8.R obtained by Sportscar365, the racing media outlet believes the racer was powered by a twin-turbo V-8 power plant, which aligns with other media reports about the production model.

Autoweek has reported that the newest Corvette could be offered with a choice of three internal combustion engines and in a battery-electric or plug-in hybrid variant. A 6.2-liter V-8 engine that generates around 500 hp is expected to be the base engine, while a 4.2-liter twin-turbo V-8 with about 650 hp may be the mid-level power plant.

The racer is expected to compete in the GT-class and replace the current C7.R.

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A look inside the Chevy Silverado's techy 4-cylinder engine

Richard Truett, Automotive News  /  August 14, 2018

In the auto industry, imitation is a very high form of flattery, and many automakers copy each other's technologies, adding just enough of their own proprietary design and unique features to keep the patent attorneys from sending the cease-and-desist orders.

So, it seems a bit strange that no other automaker has introduced a twin-turbo V-6 truck engine to compete with Ford's popular 2.7-liter and 3.5-liter EcoBoost motors in the Ford F-150. In fact, if you look at all the other full-size trucks from Toyota, Nissan, Ram and General Motors, you won't find a turbocharged gasoline engine available almost eight years after Ford rewrote the book on what a downsized and boosted truck engine could do.

But that is about to change, although not in the way I expected. After Ford's twin-turbo V-6 proved truck buyers would pay a premium for a smaller, more powerful engine, I figured competitive V-6 turbos would be out in two or three years from at least Chevrolet and Ram.

Turns out the next gasoline turbo engine will also go where no truck engine has gone before. That would be GM's new 2.7-liter turbocharged four-cylinder that can run on two cylinders at light loads. GM knows it can't put a four-cylinder engine in a vehicle designed for work if the engine can't flex some muscles and pull heavy loads. So, GM engineers packed the new engine with as much technology as I have ever seen in a four-cylinder engine.

The list of engineering advances is long and includes a new BorgWarner dual volute turbocharger -- basically a turbo that admits exhaust gases from two ports to get the turbine spinning up to speed faster -- an electric water pump, cylinder deactivation and a very trick valvetrain. And that is why we are gathered here today, to talk about the valvetrain in the new engine.

GM's aim with the 2.7-liter four-cylinder is to deliver a versatile engine that could deliver both high performance and high fuel economy under a wider range of operating modes. One of the chief criticisms of Ford's EcoBoost V-6 engines is that, under load, fuel economy suffers. GM is hoping to avoid such a large drop in fuel economy when the 2.7-liter is working hard.

The way the "Tripower" valvetrain operates is one key to the engine's V-8-like 310 hp and 348 pound-feet of torque. That rating, by the way, makes the new engine one of the most powerful four-cylinders on the market, joining just eight other four-cylinder engines rated at 300 or more horsepower.

Tom Sutter, chief engineer for the new engine, told me just cranking out a lot of horsepower wasn't the goal when the 2.7-liter was being created specifically for the retooled Silverado and GMC Sierra. If power was the only goal, GM could have simply increased the engine size, used a bigger turbocharger, or tweaked it in other ways.

GM wanted high efficiency to go along with that power. So, in addition to focusing on thermal management and reducing friction, engineers created camshafts that operate in low lift, high lift and cylinder cut-off or active fuel management mode that shuts down two cylinders. But there's more. Not only does the camshaft vary the distance the intake valves open, but cam phasers adjust the timing of when the valves open. In short, GM has created what may be the industry's most versatile variable valve system. It's certainly the first in a truck engine.

The intake camshaft, for example, uses electric device on the intake valves to move a pin to change the cam lobes.

When merging on to a highway, the camshaft operates in high lift mode, which opens the intake valves 10.5 millimeters. When cruising on the highway at a steady speed, say 65 mph, the camshaft is in low lift mode and opens the valves 7.6 millimeters. When active fuel management is operating, the camshafts switch into no lift mode and keep the valves on cylinders two and three closed.

"This is a game that's about making sure we've got not only the performance, which you get from the direct injection, turbocharger and high-lift cam profile, but you can operate at much more efficient conditions with no boost and low lift and AFM modes," says Sutter. "It gives you a lot more range in performance and efficiency. You really don't get the efficiency gain with just the turbocharger."

Here's another interesting feature of the 2.7-liter engine: The effective compression ratio changes based on the amount of fuel and air admitted into the cylinders, says Joe Moon, one of GM's top valvetrain engineers. He said there are two ways to measure compression ratio. The geometric compression ratio is the measurement that accounts for the space above the piston and the stroke volume, which is fixed and does not change. The effective compression ratio changes, Moon said, based on the cam phaser position.

What all this means is that the 2.7-liter has been outfitted with technology that expands the range where it delivers power and efficiency.

GM recently let a few reporters test the new engine -- but only for short drives and without a payload in the bed. So, we don't know how the 2.7-liter performs under duress. If it pulls a heavy load but delivers slightly better fuel economy than a V-6 or V-8, the four-cylinder could be a tough sell. I can't see many Silverado buyers boasting about having a four-cylinder under the hood -- unless it is a real marvel, much like Ford's EcoBoost V-6 was when it debuted.

"GM is priming their buyers with the new 2.7-liter four-cylinder as a sign of what is to come," says AutoPacific analyst Dave Sullivan. "Many smaller manufacturers will move to turbocharged six-cylinder engines. I could see the Lexus LS turbo V-6 end up in the Tundra or a version of Nissan's VR turbo six end up in a truck."

Sutter told me GM easily met its fuel-economy goals for the new engine -- but he wouldn't say what they are. The engine's fuel-economy ratings have not been certified by the EPA. GM is expected to launch the new engine later this year.

With the new Silverado shedding up to 450 pounds by using more aluminum and lighter-weight steel, combined with the lower weight of the four-cylinder engine vs. the V-6 it replaces, GM may have another game-changing truck engine on its hands.

"I think GM takes it to another level with their 2.7-liter four," Sullivan says. "GM is saying to Ford, 'I see your V-6 and raise you an I-4!'"

High horsepower four-cylinder engines:

  • Infiniti QX50 VC-Turbo, 2.0-liter: 268 hp
  • Chevrolet Camaro, 2.0-liter: 275 hp
  • Alfa Romeo Stelvio, 2.0-liter: 280 hp
  • Audi S3/ Volkswagen Golf R, 2.0-liter: 296 hp
  • Jaguar F-Type, 2.0-liter: 296 hp
  • Porsche Boxster 718, 2.0-liter: 300 hp
  • Subaru WRX, 2.5-liter: 305 hp
  • Honda Civic Type R, 2.0-liter: 306 hp
  • Ford Mustang, 2.3-liter: 310 hp
  • Volvo XC60, 2.0-liter: 316 hp
  • Chevrolet Silverado/GMC Sierra, 2.7-liter: 310 hp
  • Ford Focus RS, 2.3-liter: 350 hp
  • Porsche Boxster S/Cayman S, 2.5-liter: 350 hp
  • Mercedes-Benz CLA AMG45, 2.0-liter: 375 hp

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GMC Sierra diverges from Silverado with unique box, tailgate

Michael Wayland, Automotive News  /  August 26, 2018

ST. JOHN'S, Newfoundland — General Motors is delivering on its promise to better distinguish the GMC Sierra from its sibling, the Chevrolet Silverado, offering technology and amenities that go well beyond the usual cosmetic differences.

In the past, GM set the two full-size pickups apart mostly through styling and pricing. But that's changing for the redesigned 2019 versions, which are arriving in dealerships nationwide.

Sierra-exclusive features include a six-way tailgate, next-generation video rearview mirror, large multicolor 3-by-7-inch head-up display and adaptive ride control with active dampers that adjust every 2 milliseconds based on sensor feedback to keep the truck and whatever it's carrying steady.

GMC also will offer an industry-first composite box — scheduled to start production in April — that GM calls the CarbonPro.

It replaces the standard steel inner panels and floor with a lightweight carbon fiber composite that is 62 pounds lighter.

"Some say that the meek will inherit the earth," said Tim Herrick, executive chief engineer of GM's full-size trucks. "I'm betting on carbon fiber boxes and cockroaches. It's just unprecedented strength."

'It seems so simple'

The most notable Sierra-exclusive feature is the six-way tailgate that will be standard on the SLT, AT4 and Denali models. It will be the focus of the initial marketing effort early next year, Phil Brook, GMC vice president of marketing, said last week at a media event here.

The tailgate's multiple positions allow it to be used as a standing workstation, a step for climbing into and out of the bed or as a seat.

An inner tailgate, part of the primary one, can fold down for easier loading or be used as a step, among other uses.

The inner gate is also part of a load-stop feature to help keep cargo in place when the main tailgate is down, and can be used as an exterior table when the main gate is up.

"It's a complicated solution that was very difficult to engineer, but it seems so simple," said Matthew Noone, GMC director of exterior design, who held unofficial customer clinics of the tailgate by leaving it open at retail locations such as dealerships and Home Depot stores to gauge responses.

The new tailgate has been more than three years in the making, and GMC officials are continuing to find new use cases for it as the pickups arrive in U.S. showrooms, including the addition of lights and speaker accessories that dealers will install.

"We're going to sell trucks just because of this gate," Noone said.

Prices for the redesigned Sierra, like its Silverado sibling, decreased on some lower trims, while rising on the higher models because of additional standard features.

Trim levels

Trims for the 2019 Sierra models are base, SLE, Elevation, SLT, AT4 and Denali. Starting prices range from $31,095 for an entry-level regular cab truck with a long box to $56,195 for a crew cab Denali model with a short box. All prices include shipping.

Starting prices on SLE crew cab models decreased as much as $1,300 compared with 2018 models, while base SLT prices — more than 40 percent of current sales — rose $1,500 to $45,795 for a double cab model with a standard box. Starting prices for Denali, based on configuration, increased as much as $2,000.

Prices for the new trims for 2019 start at $41,795 for Elevation and $52,295 for AT4.

Brook said GMC expects AT4 off-road models to grow to 10 percent or more of Sierra sales.

He said, "We see a spot in the market that no one's doing, and that's premium off-road."

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GM to recall 1.2M pickups, SUVs for steering problem

Michael Wayland, Automotive News  /  September 13, 2018

DETROIT -- General Motors is recalling more than 1.2 million full-size pickups and SUVs globally because of a potential steering problem that could increase the risk of a crash.

The automaker says the electric power steering on the affected vehicles can fail momentarily during a drop in voltage and suddenly return, mainly during low-speed maneuvers such as turning. If electric power steering assist is lost and then suddenly returns, the driver may have difficulty steering the vehicle, according to GM.

All affected vehicles are from the 2015 model year. In the U.S., which represents more than 1 million of the affected vehicles, the recall campaign includes: Chevrolet Silverado (450,711) and GMC Sierra 1500 (186,083) pickups and Chevy Tahoe (145,198), Chevy Suburban (79,505), Cadillac Escalade and Escalade ESV (45,270) and GMC Yukon and Yukon XL (109,151) SUVs.

Nearly 96,000 potentially defective vehicles were sold in Canada.

GM, according to company spokesman Tom Wilkinson, is aware of 30 accidents resulting in two injuries because of the defect. No deaths have been reported, he said.

The automaker recalled some 2014 model trucks last year for the same problem, including 800,000 Chevy and GMC full-size pickups. The full-size SUVs were not recalled, as they were previous-generation and the problem was not occurring in those models, according to Wilkinson.

If power steering assist is lost, a driver information center message may alert the driver to an electric power steering problem. Also, other electrical subsystems may shut down at the same time or just before the event, which could temporarily disable the radio, Stabilitrack stability control system, driver information center, chimes, door-lock cycling, air conditioning or cruise control.

GM will notify owners of the affected vehicles and dealers will update the electric power steering module software for free.

No date has been set for the recall to begin but Wilkinson said dealers have the updated software packages to fix the problem. He encouraged customers to call their dealers to schedule an appointment.

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GM returning Cadillac HQ to Michigan from New York

Michael Wayland, Automotive News  /  September 26, 2018

DETROIT -- General Motors is moving Cadillac's headquarters back to Michigan roughly three years after the brand moved to New York City's trendy SoHo neighborhood.

The decision comes less than six months after GM executives ousted Cadillac President Johan de Nysschen, a former Infiniti and Audi executive, in exchange for Steve Carlisle, a GM lifer who most recently led the automaker's Canadian operations.

Cadillac on Wednesday confirmed that the automaker has decided to relocate the luxury brand's headquarters back to Michigan, citing the move "will further support" the brand's upcoming launch cadence of a new or redesigned vehicle every six months through 2020.

A GM spokesman confirmed that Cadillac will move to a location near GM’s technical center in Warren, Mich., north of Detroit. A probable location would be the former headquarters of longtime GM ad agency partner Lowe Campbell Ewald in Warren, Mich., north of Detroit. GM bought the 150,000-square-foot building for $2 million in 2014.

"The move will place the Cadillac brand team closer to those responsible for the new Cadillacs, including design, engineering, purchasing and manufacturing, ensuring full integration of Cadillac's global growth strategy," Cadillac said in an emailed statement to Automotive News.

GM says Cadillac will maintain a brand presence in New York City with its current Cadillac House headquarters, which the company reportedly leased for 10 years and spent $12.7 million to renovate.

It's unclear how many of the brand's roughly 110 employees in New York will relocate to the Detroit area. A Cadillac spokesman declined to comment past the company's statement.

Carlisle told The Wall Street Journal, which first reported the decision, that the move back to its home state is an attempt to streamline “the communication process between the Cadillac team and the GM partners.”

Time in Detroit

Earlier this month, Carlisle told reporters that he was spending a lot of his time in Detroit, not New York.

The original move occurred under de Nysschen, however it was believed then-Cadillac CMO Uwe Ellinghaus, who started before de Nysschen and left the company at the beginning of this year, was a main proponent of the New York headquarters.

"Cadillac's move to New York made sense in theory, but in practice it didn't address what Cadillac really needs to turn the brand around -- a laser focus on the product,” said Jeremy Acevedo, Edmunds' manager of industry analysis, in a statement. “Moving the headquarters to Warren, where the heart of GM's design and engineering teams are, is a big statement that Cadillac is serious about bringing the brand and product visions together.

Acevedo said the brand has spent “a lot of time and money trying to emulate the Germans,” but maybe the move back to its home state “is a sign that the company is ready to embrace its Detroit heritage and lean into its unique place in American culture.”

Since the move to New York was announced in 2014, Cadillac's sales have dropped 12 percent and the brand's share of the luxury auto market has fallen from 9.3 percent to 7.7 percent, according to Edmunds.

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Honda to invest $2.75 billion in GM's Cruise autonomous vehicle unit

Michael Wayland, Automotive News  /  October 3, 2018

DETROIT -- Honda Motor Co. will invest $2.75 billion in General Motors' autonomous vehicle operations, including plans to develop and deploy a purpose-built self-driving vehicle.

The Japanese automaker will receive a 5.7 percent stake in GM Cruise LLC for the investment, which includes an immediate $750 million and another $2 billion for development and deployment of self-driving vehicles over the next 12 years, GM and Honda executives said Wednesday.

Click here for the press release.

Honda, according to GM CEO Mary Barra, will provide Cruise with additional engineering, design and technology expertise and assist in the company’s “global reach and the ability to deploy at-scale.”

“It will really expand Cruise’s leadership in the development and deployment of autonomous technology,” Barra told reporters Wednesday at the company’s technical center in suburban Detroit.

The investment values Cruise at $14.6 billion -- $3.1 billion more than when SoftBank Vision Fund, a prominent technology investment firm, announced plans to invest $2.25 billion in the operations in May.

That deal gave SoftBank a 19.6 percent stake in GM Cruise, which includes Cruise and Strobe Inc., a lidar company GM acquired in October 2017.

The announced partnership sent GM shares up 2.1 percent to $33.99 as of 10:27 a.m.

The investment from Honda comes roughly nine months after GM announced plans to launch public ride-hailing services with self-driving vehicles that don't have manual controls such as steering wheels and pedals, starting in 2019.

GM President Dan Ammann said next year “remains the objective,” however he stressed that safety will be the determining factor on when the vehicles launch. 

New AV

Cruise CEO Kyle Vogt, in a post on Medium, said the company has already started “quietly prototyping a ground-breaking new vehicle over the past two years that is fully released from the constraints of having a driver behind the wheel.”

“Building a new vehicle that has an incredible user experience, optimal operational parameters, and efficient use of space is the ultimate engineering challenge,” he wrote. “We’re going to do this right, and by joining forces with Honda we’ve found the perfect partner to help make it happen.”

Ammann, who oversees Cruise, on Wednesday said the vehicle will be the first purpose-built vehicle at-scale that’s “free from the constraints of having to think about vehicle design and having a driver at the wheel, and all the traditional approaches to that.”

“This takes us into the true future of mobility,” he said, later declining to provide a timeline for production or deployment of such a vehicle.

Cruise’s current self-driving fleet is based on the Chevrolet Bolt EV. The newest iteration of the car took out the manual controls such as pedals and steering wheels, however still has the traditional interior of the car.

Vogt, in the post, questioned why shouldn’t the “car of the future” include “giant TV screens, a minibar and lay-flat seats? Maybe it should,” he wrote.

A teaser photo of the front end of the vehicle released Wednesday shows a rectangular, pod-like vehicle with large vertical illuminated headlights. Ammann, on a call with investors Wednesday, said the plan is for GM, not Honda, to manufacturer the vehicle.

GM was expected to begin testing its autonomous vehicles this year in New York. However, Barra on Wednesday said the company is focusing its current efforts in San Francisco.

“We’ve really refocused the efforts to make sure that we are as efficient as possible to be able to deploy safely,” said Barra, adding the company continues “early work” in the Big Apple. A company spokesman confirmed Cruise has completed mapping streets in the city.

‘Running start’

Ammann described the Honda partnership as having “a running start,” as the automakers have previously teamed up on the development of other advanced technologies. He called the relationship between the two companies “longstanding and deeply trustful.” 

Honda’s investment in GM’s Cruise comes four months after the two companies announced plans to develop a new generation of batteries aimed at cutting costs and accelerating the companies’ rollout of electric vehicles.

The companies also previously formed an advanced-technology alliance announced last year between GM and Honda, which have been working on advanced hydrogen fuel cells for deployment in 2020.

Honda Executive Vice President and Representative Director COO Seiji Kuraishi, via teleconference Wednesday, said Honda hopes the collaboration “will further strengthen” the company’s efforts and partnerships with GM.

When asked about reported conversations between Honda and Google’s self-driving affiliate, Waymo, Kuraishi declined to directly comment on those talks.

“As we’ve announced today, we decided to announce an exclusive collaboration with GM and Cruise,” he said through a translator.

While the tie-up is exclusive on Honda’s end, GM is not ruling out adding other partners to Cruise.

“In terms of other partnerships and opportunities, we will evaluate things as they come along but we have an incredibly well-resourced plan and a huge pool of talent behind this effort now that’s going to enable us to go as quickly as we possibly can,” said Ammann, adding the company has been “extremely selective” in taking on partners.

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GM deploys new defense unit, hires U.S. Army veteran

Michael Wayland, Automotive News  /  October 5, 2018

General Motors' new military defense unit is up and running and has hired a U.S. Army veteran as its president.

GM Defense LLC, a Washington, D.C.-based subsidiary of the automaker, recently appointed retired Maj. Gen. John Charlton to the position. An exact appointment date was not immediately available. He will report to GM Defense CEO Charlie Freese, a 15-year GM veteran and fuel cell technology specialist. Freese reports to GM product chief Mark Reuss.

The news comes roughly a year after Automotive News first reported GM's plans to resurrect GM Defense after selling its previous defense unit to General Dynamics Corp. for $1.1 billion in 2003.

Prior to joining GM Defense, Charlton spent a 34 years in the U.S. Army, with three combat tours in Iraq and one in Afghanistan. He held command positions at every level and various senior staff positions on the U.S. Joint Chiefs of Staff.

Charlton, who most recently was a commanding general for the U.S. Army Test and Evaluation Command, said he is "proud" to continue his career in the defense industry with GM, which has the "flexibility and agility to provide scalable options that can meet the ever-changing requirements of our country's warfighters."

GM Defense initially is expected to focus on military and aerospace applications for GM's emerging fuel cell technologies, including a fuel cell-powered Chevrolet Colorado known as the ZH2 and the Silent Utility Rover Universal Superstructure platform.

In June, GM announced an exclusive deal with Liebherr-Aerospace of France to develop a hydrogen fuel cell-powered auxiliary power unit for aircraft applications. An auxiliary power unit typically powers an aircraft's lighting, air conditioning, backup systems and other auxiliary functions.

GM Defense also is advertising itself as a specialist in vehicle development, system cybersecurity, and electric and autonomous vehicle technologies.

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Think GM will make a move on AM General?  Fits nicely in their plans, but AMG doesn't appear to have much future at the moment.  HMMWV is winding down (though they got a big contract for ambulances recently), not much else on the horizon.  Maybe that postal vehicle?

Maybe together GM and AMG could develop a fuel cell powered autonomous 2.5 ton 6X6 successor to the CCKW and M-35!

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Chevy's 2019 Silverado with 4-cylinder engine rated at 21 mpg combined

Michael Wayland, Automotive News  /  October 10, 2018

DETROIT -- The 2019 Chevrolet Silverado with a new four-cylinder engine will achieve an EPA-estimated 21 mpg combined, or 20 city/23 highway.

The ratings, for rear-wheel-drive models, are not much better than the fuel economy of the redesigned pickup's 5.3-liter V-8 engine, which offers 19 mpg combined (17 city/23 highway), according to the EPA's website.

The 2019 Silverado 4x4 models with the four-cylinder engine will achieve 20 mpg combined, or 19 city/22 highway.

The fuel efficiency of the Silverado's 2.7-liter turbo engine, which is standard on midlevel LT and RST models, is in line with other entry-level truck engines from Ford Motor Co. (3.3-liter V-6) and Fiat Chrysler Automobiles (3.6-liter V-6 with a light hybrid system) that offer 22 mpg combined. Those engines, however, offer up to 25 mpg highway.

The engine, according to GM, offers 14 percent more torque and 13 percent better city fuel economy. It is rated at 310 hp and 348 pound-feet of torque and is paired with an eight-speed automatic transmission.

"It's fun to drive every day -- quick from the start, and pulling hard under acceleration," Tim Asoklis, chief engineer for the Silverado, said in a statement Wednesday.

The four-cylinder engine, as reported, will offer maximum towing capacity of 7,200 pounds and a 2,280-pound maximum payload. The payload is up to 600 pounds better than comparable models from Ford and Ram, but the tow rating is up to 200 pounds less.

The Silverado LT starts at $38,395 with the four-cylinder engine with a double cab and standard bed. The same RST model starts at $40,295. It's $2,400 more for each of the models with a short bed and crew cab, which makes up a majority of U.S. pickup sales. All pricing includes shipping.

The 2019 Silverado will be offered in eight trims paired with six engine/transmission combinations. Models with V-8 engines are already on sale.

The four-cylinder models are expected to begin arriving in dealers by the end of the year.

It's unclear whether the redesigned GMC Sierra, the Silverado's sibling, will offer the same fuel economy. Some of the V-8 models in the Sierra offer slightly different fuel efficiency compared to the Silverado.

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Photo 6.jpg

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Geez, what's next?  A 3 cylinder engine with twin turbos and a 24 speed transmission that gets 23.5 mpg?  Just keep it.  Not for me.

Edited by grayhair

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Just like those Ford Ecoboost engines.  I guess the emissions are better.

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6 hours ago, RoadwayR said:

Just like those Ford Ecoboost engines.  I guess the emissions are better.

Not sure I follow you here.  Now recognizing that some say the Ecoboost should more properly be called ...'Eco-or boost" I think when driven with a reasonable foot, they do provide good power and reasonable economy.  I think "reasonable' is key here-too many guys just have to have their foot in it all the time.  

I remember listening to drivers bitching that the 350's we bought just did not have enough power.  My comment was always.."yes and big power can be cost effective-as long as the guy driving it had a coin feed next to the gear shift to pay for the fuel as he continually had his foot in it across  the entire RPM band.

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21 minutes ago, Red Horse said:

Not sure I follow you here.  Now recognizing that some say the Ecoboost should more properly be called ...'Eco-or boost" I think when driven with a reasonable foot, they do provide good power and reasonable economy.  I think "reasonable' is key here-too many guys just have to have their foot in it all the time.  

I remember listening to drivers bitching that the 350's we bought just did not have enough power.  My comment was always.."yes and big power can be cost effective-as long as the guy driving it had a coin feed next to the gear shift to pay for the fuel as he continually had his foot in it across  the entire RPM band.

Yep that is true about how you drive the ecoboost. Even though I sell Ford's I always try to see what realistic  miles in real world driving you will get.  I drove a loaded F150 with the 2.7 ecoboost and 10 Spd to FL from NY for a relative who was moving. Every space that could fit something had something including power generators and tools. I got a combined 23mpg all they way to FL. It still had nice acceleration, torque and fuel economy and I was going 75 mph whenever I could.

I drive a Fusion Sport which has the 2.7 ecoboost and AWD but a 6sp. I get a combined 21 to 22  which is only 1mpg different from the 2.0 ecoboost in my previous Fusion Titanium. However on my 3hr each way trip to Gerhart last Saturday I got a combined 28 mpg for the whole trip. It was  actually giving me 31 to 32 on the highway when I was passing Allentown then dropped to combined 28 because of the secondary road driving. At 33k miles it does get better mileage now than the first months of being new.

Today I drove the refreshed 2019 Edge 2.0 with the new 8 sp. It was smooth and torquey and can see why the 3.5 normally aspirated is no longer necessary. I averaged 28mpg on highway on a short trip.

Some customers complain about the ecoboost mpg but more often than not most love it compared to previous bigger engines. How you drive them makes a big difference. You do not have to stomp on them to get torque rise especially the newer ones with dual scroll turbo and/or with multi speed transmissions. 

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GM's 2.7-liter turbo engine is in the wrong truck

Richard Truett, Automotive News  /  October 10, 2018

We all knew General Motors was taking a big chance slotting a four-cylinder engine in the 2019 Chevrolet Silverado pickup.

There would have to be a very compelling reason for truck buyers to give up either two or four cylinders and step down from a V-6 or a V-8.

But now that we know the fuel economy ratings for the Silverado's new 2.7-liter four-cylinder engine are 20 mpg city, 23 highway and 21 combined, it is hard to see what marketing types call the "why buy."

When Ford introduced the 3.5-liter twin-turbo EcoBoost V-6 in the F-150 in 2011, the compelling reason was tire-smoking performance combined with the ability to haul an enormous load. And if the driver kept his foot from pressing too hard on the accelerator -- which limited the use of the turbochargers -- good fuel economy could also be had. Despite endless chest-beating from Ford's hyperactive public relations department at the time, drivers weren't going to get Eco and Boost at the same time, but they could get both if they learned how to drive the truck properly. No other truck offered that kind of flexibility.

Ford successfully convinced legions of buyers to pay a premium for a smaller engine, but I am telling you flat out right here and now that GM will fail to do the same with the new 2.7-liter, which costs more -- a lot more -- than the 4.3-liter V-6 that remains available in the 2019 model.

Here are the numbers:

The basic 2019 Silverado Work Truck starts at $29,795 and comes equipped with the ancient but trusty 4.3-liter V-6. The four-cylinder engine is standard in the 2019 Silverado LT, which starts at $38,395 -- $8,600 more than the Work Truck. (Neither price includes shipping.) Now, not all of that price difference is related to the engine. The equipment levels vary in the two trims. The 2.7-liter has a new eight-speed automatic transmission, while the 4.3-liter V-6 soldiers on with an old six-speed automatic gearbox.

The fuel economy on the 2019 4.3-liter version of the Silverado has not been EPA rated, but the 2018 Silverado with the same powertrain -- and lot more curb weight -- got better highway fuel economy than the lighter 2019 model with the 2.7-liter. The 2018 V-6 Silverado delivered 18 mpg city, 24 mpg highway and 20 combined. It only stands to reason that the 4.3-liter powertrain in the 2019 Silverado will get better fuel economy than last year's truck since the new model sheds up to 450 pounds.

Now here's the clincher: A small engine in a large vehicle can be -- and often is -- just as thirsty as a larger engine in the same vehicle if it has to work hard all the time. The advantage here usually goes to the larger engine. And there is precedent for this.

Ford learned a painful lesson in what is called "powertrain matching" early in the EcoBoost rollout, when late in 2011, it offered a 2.0-liter four-cylinder in the Explorer crossover. It was a dog that didn't sell because the 240-hp, 2.0-liter engine had to work so hard to move the 4,500-pound light truck that it neither provided good performance nor good fuel economy. Ford engineers learned they had to do a better job matching an engine's torque and horsepower output to the vehicle's weight, aerodynamics and duty cycle. The Explorer's 2.0-liter engine was replaced by a 2.3-liter at the end of 2015 rated at 280 hp. Highway fuel economy remained the same, at 27 mpg, with the bigger engine.

Automakers don't release fuel economy results for vehicles as they are towing heavy loads. Indeed, there is no EPA test for that. But I can see the fuel economy figures for the Silverado's 2.7-liter engine careening down Davis Dam like a semitruck with overheated brakes when a customer hooks the Silverado up with a heavy trailer.

GM says the 2.7-liter turbo, four-cylinder engine develops more torque and horsepower than the 4.3-liter V-6, which is true. But that makes me wonder why GM just didn't offer a new, lighter, more modern V-6 to replace the 4.3. The company's 3.6-liter V-6 would have been an excellent choice for the Silverado.

All this is not to say GM won't have a strong chance to outright own the fuel economy crown for full-size trucks. Next summer, the Silverado will get a 3.0-liter six-cylinder turbodiesel engine that is widely expected to deliver over 30 mpg on the highway.

So here's the bottom line: The new 2.7-liter engine, loaded with all sorts of technology to boost fuel efficiency and performance, is in the wrong truck. The midsize Chevrolet Colorado is where the 2.7-liter engine will shine, delivering fuel economy and performance along with the ability to haul heavy loads.

I'll give the four-cylinder exactly one year in the Silverado before it fades into the Colorado and becomes a big success.

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