By on July 21, 2011

The word “truth” in our title has long been a cudgel for our critics, who, finding fault with our analysis, condemn us for failing to publish their version of the truth. But, as I’ve steadfastly maintained since taking up TTAC’s editorial reins, we do not hold ourselves up as the sole source of truth. Rather, by provoking an engaging discussion, we hope that our readers will use our posts as a jumping-off point to debate the issue at hand with vigor. The truth, as I find myself saying again and again, is a journey, not a destination.

Accordingly, I’m always thrilled when manufacturers read our pieces and offer up their own counterpoint to the discussion, broadening our understanding of the issue at hand and moving the conversation forward. One of my posts from yesterday, which examined GM’s decision to invest in full-sized truck production in the midst of CAFE negotiations and an inventory backlog, has drawn just such a thoughtful response from GM’s Tom Wilkinson, which is published after the jump. It provides some inside perspective on GM’s decision to move forward with the next generation of full-sized pickups, and is a great example of the kind of conversations that TTAC hopes to start every day.

Wilkinson, who works on the Chevrolet communications team, writes:

Customers currently buying pickups are generally those who need the capability of a full-size truck for hauling and/or towing. Consequently, we expect full-size pickups to remain around 11 percent of the total U.S. vehicle market. Chevrolet is currently a strong second in the segment, with 27 to 28 percent share, and we expect to defend, and potentially grow that share.

Following a boom during the mid-1990s, resulting from the demise of most large cars and station wagons coupled with cheap gas and attractive lease payments, utilities have returned to pre-boom sales levels. Full-size utilities are purchased by affluent customers who need passenger and cargo space and towing capability, and we expect volume to remain relatively stable. Chevrolet intends to defend its dominant position (almost 50 percent share) with a new generation of more efficient Tahoes and Suburbans.

You are correct that many of the personal use buyers who fueled the truck boom have moved on, to sporty cars for those who just wanted power and style, and to crossovers for those who just need space. Please note that Chevrolet and other GM brands are doing very well in both segments, so it is not like we lost these customers.

I don’t think we, or any of our competitors, expect full-size trucks to return to housing-boom levels. Note that we have resized our manufacturing footprint to compete effectively and profitably at realistic future sales levels. That fact seems to be lost on some of the critics, who seem to have snoozed through the plant closings of the past few years.

 

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42 Comments on “GM Defends Full-Sized Truck Investment...”


  • avatar
    HerrKaLeun

    I think this is a very good response from him (and i really don’t like GM and the wanna-be truck drivers who just “need” one to show off)

    It also shows to what importance TTAC came that major manufacturers feel the need to comment on TTAC stories.

    • 0 avatar

      TTAC punches above its weight. Autoblog and Jalopnik get more traffic but their editors read TTAC and so do the folks at the car companies. They know we have credibility with our readers.

      Actually, this response from GM and the interview that the head of Ford’s SVT team gave Autoblog on the Raptor bent-frame issue shows that Detroit may actually be getting the hang of PR in the 21st century. At the Chicago Auto Show this year, Mark Reuss, was going on about how he was using Facebook and Twitter to mollify unhappy customers. Maybe it was more than just auto show bs.

      • 0 avatar
        MikeAR

        Ronnie, I read the Raptor interview on Autoblog. It was pretty interesting but I still don’t know quite what to make of it. It’s too easy to see both sides of the issue. The Raptors were being abused but the trucks were sold as being tough, almost Baja ready. Ford has a very good point though that they were exceeding design limits. Some of the trucks too had been modded to increase top speed so who’s more in the wrong? The video with the article was great though.

      • 0 avatar
        Z71_Silvy

        but I still don’t know quite what to make up it.

        Ford’s blaming the customer yet again.

      • 0 avatar
        MikeAR

        You have to admit that the customer shares at least some of the blame.

    • 0 avatar
      don1967

      +1

      It takes a big car guy to admit when the other car guy is right. As a career GM-hater who secretly enjoyed RF’s death watch series, I am impressed not only by GM’s frankness but also by TTAC’s objectivity in acknowledging it.

  • avatar
    Bimmer

    Didn’t we read not long ago that GM has >90 days supply of trucks sitting unsold? Why can’t they stretch refresh cycles? I highly doubt that people who use trucks as work vehicles really would care about looks. What they do care is efficiency. Just look at 2012 Impala, it’s still going with updated powertrain. How about restarting development of that diesel engine that GM shelved prior to bankruptcy to be able to fit it in regular full size truck, even if the body stays the same.

    • 0 avatar
      APaGttH

      They already have stretched the cycle. GMT900 is from 2007, it is the oldest fullsize truck platform for sale today in the United States. If they don’t update engine/tranny/interior they will continue to become more uncompetitive in the space, in particular, against Ford.

      They hold the number two spot for MPG (Ford knocked them off the block with their new engines) and the GMT900 platform is still competent.

      I think we’ll see all the makers go to longer development cycles (and I seriously wonder how long Nissan will keep the Titan alive) on their fullsize truck and SUV platforms into the future.

      GM’s inventory level was at 122 days on fullsize trucks, worst in the industry, but Toyota and Dodge were over 90 days also – so it wasn’t a GM specific problem. Ford had the shortest inventory but that makes sense as they have a newly launched platform.

  • avatar
    jaje

    GM has every right to defend its platform, though I’m hoping GM does the right thing and merge Silverado with the Sierra (and make GMC defunct) and save millions promoting / marketing two slightly different versions of the same truck. I know…”professional grade” and the tales that I won’t buy a Chevy b/c I don’t like them but love my GMC, but does it really bring in the profit to support an entirely different marketing/sales/dealer/etc. program? The majority of defunct Olds/Pontiac/Geo/Saturn/Saturn/Hummer/Saab went to back to GM in some form or fashion…the demise of GMC would do the same. Make a Buick/Caddy dealership and GM – then be done with it with 3 brands down from 10.

    GM can make a big move by offering a good light duty diesel in their 1/2 lineup. Imagine getting 33% better fuel economy over a gas powered 1/2 ton truck with more towing power all in that lighter truck platform (instead of having to upgrade to a 3/4 or larger to get a diesel option).

    • 0 avatar
      Z71_Silvy

      though I’m hoping GM does the right thing and merge Silverado with the Sierra (and make GMC defunct)

      That would be the COMPLETE wrong thing. Chevrolet carries the weight for money spent on truck development.

      Let’s say it costs Chevrolet $10.00 to make/design a Chevy truck. Then they sell that truck for $12.00. Now, to change that truck into a GMC only costs GM $2.00 (because a VAST majority of development is shared), yet they can turn around and sell that truck for $14.00.

      The profit margins on GMCs are VERY high.

      • 0 avatar
        Dynasty

        I did a quick comparison a couple months back on “similarly” equipped trucks by Chevy and GMC.

        GMC seems to come with more standard features. To get the Chevy competitive with the GMC, the GMC truck would have actually been less expensive.

      • 0 avatar
        nrd515

        When I was shopping GM trucks back in ’00, If you equipped a Chevy and a GMC the same, the price was so close, both sticker and out the door, it was a coin toss. I actually wanted a Chevy, because they just were better looking, to me anyway, but I ended up with a Sierra because I couldn’t find a single Chevy 1500 ext cab 4×4 in this area equipped the way I wanted. The Chevy trucks were loaded with add on crap, or they had the 4.7 engine, etc. There were 5 Sierras at the dealer I bought mine at alone that were OK. A friend of mine just bought a Sierra, and he bought it solely because it looks better than the Silverado. The price difference was about a hundred bucks. I think both are equally ugly. Hopefully, the next generation looks better. The Ram and F-150 are light years ahead of the GM trucks.

      • 0 avatar
        DenverMike

        @Z71_Silvy

        Speaking of which, as long as GM has/keeps Buick, why not badge engineer everything on the Chevy lineup (except for Corvette,Camaro,Volt)? Reason being, business owners already at the GMC dealer buying say 2 or 3 Sierra service trucks may one-stop shop a Buick compact for the daughter or a crossover for the wife.
        One thing GM noticed right after they killed off their line of medium duty trucks was (something like) a 12% decline in car and light truck sales attributed to the one-stop medium duty shoppers.

  • avatar
    Domestic Hearse

    Mr Wilkinson,

    Thanks for the response!

    We can see that the truck market is shrinking — and the competition for each full-size truck sale becoming more fierce; and that there is a long-standing goal to make full-size trucks (and SUVs) more efficient; and Ford has seen considerable success with it’s V6 Ecoboost power plant….

    Is it time to resurrect the mothballed 4.5L Duramax Light Duty Diesel Engine?

  • avatar
    Conslaw

    I don’t like pickups, but it’s just good business for GM to invest in improving their pickups. It’s a large and profitable segment of the business, and the competitors aren’t sitting still. Hopefully some innovation will trickle down to smaller and larger trucks and even cars.

  • avatar
    Educator(of teachers)Dan

    “Following a boom during the mid-1990s, resulting from the demise of most large cars and station wagons coupled with cheap gas and attractive lease payments, utilities have returned to pre-boom sales levels.”

    And the demise of those large car and wagons were directly a result of how many decisions within the GM hierarchy?

    • 0 avatar
      Brian P

      Demographics, and corporate average fuel economy … CAFE on trucks had a lower target than it did for cars.

      Yes, Ford left their rear-drive Panther platform in production longer than GM left their rear-drive full-size cars, but even Ford gave up on wagons. And at the end, Panthers were only being bought by fleets and geriatrics. Un-cool.

      • 0 avatar
        golden2husky

        Cafe as an excuse is a cop-out. The profit margins on trucks was much higher than traditional large cars. The design effort that went into the trucks was far greater than the scraps the cars received. The cars were left to rot on the vine.

      • 0 avatar
        MikeAR

        True, CAFE made it inevitable that cars would be a much lower priority for the domestic companies. It put them maybe 10-20 years behind the rest of the world.

  • avatar
    Sundowner

    I understand the position of GM, but understanding it makes it no less rediculous. GM (and others) have not made a full size truck in years. They are oversize trucks with chorme grilles the size of a child’s bed and to these grilles are proudly fastened brand emblems proprtional to the driver’s ego.

    If GM had a shred of engineering judgement (not profit analysis) they’d eliminate the ‘full’ size truck platform, invest in the ‘mid’ size platform, and create a clear distinction between private use ‘trucks’ and medium duty TRUCKS. ‘Full’ size trucks are dead on the vine, it’s time to move on and move the R&D dollars elsewhere.

  • avatar
    ott

    Like it or not, pickups are a necessity for a lot of people. Ford has invested major dollars upgrading their platforms, and GM needs to keep up or risk losing market share. To put it simply, you have to spend money to make money.

    • 0 avatar
      Sinistermisterman

      +1
      Although both Ford and GM are flashing similar looking products, one look under the hood will tell you how far GM are lagging behind engine wise. Whilst Ford are using their relatively new 3.7 V6 as a base engine, GM are still using a variant of their old-old-ooooooold 4.3 V6, and the torque, BHP & MPG figures show this. Look further up the range of engines and again, Ford are leading the way on every engine. GM need to invest some cash in new engines – and I’m guessing this is where a majority of the money will be going.

      • 0 avatar
        Educator(of teachers)Dan

        And as I’ve said before, if GM would have put the Atlas I6 in their base model trucks back when the engine was introduced I would have a Chevy sitting infront of my house now instead of a Ford. I would have had to pick the Chevy for the sheer awesomeness of smooth inline 6 cyl power.

      • 0 avatar
        geozinger

        Meh, OHC engines. Waay too much is made of this kind of thing. The only people who care about this is are the people on the internet.

        If your driving one of these trucks for 10 years or more the pushrod motor can take a lot more abuse, i.e. less sensitive to oiling issues, than OHC motors.

        Ask the vast majority of the pilots of these trucks and see if they care about OHV vs. OHC. I’d be surprised if you got anyone who cared about it at all.

        So long as it starts and runs, and does so every time for the next 20 years, that’s what matters.

  • avatar
    Carlson Fan

    “That fact seems to be lost on some of the critics, who seem to have snoozed through the plant closings of the past few years.”

    I believe the now closed Janesville, WI plant where our ’07 Tahoe was built was the one of the oldest and largets truck plants.

    I noticed he referenced towing more than once. Just go to a boat landing or parking lot out west in the winter and see whats pulling those 21′ bowriders and 4 place enclosed snowmobile trailers. Pretty tough to find a RAV, CRV or any other silly cute ute….LOL

  • avatar
    DenverMike

    No doubt a huge growth potential here. GM’s market share is already tremendous considering its dated drivetrains and no response to the King Ranch, Raptor, Platinum, Harley Davidson or F-450 & up.

  • avatar
    mikey

    Boy….that Tundra sure showed GM how to build a truck.

    They must of sold at least 15 last month.

    • 0 avatar
      NormSV650

      Cash cow along with highest corporate sales and profits, why not? What’s cafe, a fine?

      Ford and GM just play cat and mouse with Nissan and Toyota trucks anyways.

  • avatar

    That’s a pretty Chevy Ridgeline they’re showcasing in that picture.

  • avatar
    Junebug

    I grew up on a farm, a tobacco farm – it’s NC, get over it ok. Anyway, my uncles used Ford and IH (remember them) and they were tiny compared to the motorhomes with pick-up beds attached running around today. But, somehow those old men, WWII vets BTW, managed to work the fields and get the crop to market. Amazing! And they would never understand why these days a real trucker (using my Tundra announcer voice) has to have 4 doors, wifi, blutooth, leather, CD, GPS, dual zone AC, sunroof, etc etc in a truck. Nah, it was a Ford 390 and 3 on the tree, no 4X4 either. AC? open the window! But I guess what we got now is progress, and it shows – priced a new truck lately? No wonder all the farms around my home are now sold and turned into suburbs or trailer parks.

    Would a return to something simple, smaller, something that doesn’t need a football field to turn around in or have to be parked in the back lot in 1.5 spaces, be logical? I guess not, the Ranger is dead, why buy a Taco when a Tundra is a few thousand more and you get so much more blah blah.

    I detail cars on the side and occasionly do a truck – I hate driving them back to the customer. It’s like the thing gets wider and the roads stayed the same, I got an eyeball on each fender. Not to mention I need a painters platform to get the whole hood buffed out. But they’re toooooooooough, yeah right, I’ve got to be careful I don’t dent the damn beer can sheet metal with the buffer.

    Maybe that’s why if I were in need of a truck, I’d get – no wait those are “classics” now and cost a fortune, I’m glad I don’t farm…

    • 0 avatar
      geozinger

      I grew up in rural Northeast Ohio, where the weekend fun is dirt track racing. Back in the late 80′s, a buddy of mine and I had cars we raced in the street stock division, lots of fun for low bucks. We hauled everything in a 145 HP, 6 cylinder, three on the tree Chevy pickup with a reinforced cap and hauling a flatbed car trailer.

      The race car, all of our tools, our spare tires and selected parts. She didn’t fly down those country roads, but we got there and she took us home every time. The smaller size compared to today’s behemoths was a huge advantage in cramped pits.

      It would have been nice to have had more power in the old truck, but I don’t think it really would have been a material advantage.

  • avatar
    geozinger

    +1

  • avatar
    VanillaDude

    The best selling vehicle in the US is the F-150. There are many real reasons this is the case. Thinking you know one of those reasons then beating it to death with an opinion doesn’t make you smarter than Ford.

    Since when has it become so popular to think one person’s intelligence is superior to millions of other’s? When you criticize a vehicle like a pick up truck, you look like an idiot.

    If you think pick up trucks today are no good, buy something else. If you want a Ranger, then when one is made – buy the damn thing. When Ford gets word that there are enough people buying smaller pick up trucks to justify investing in a newer Ranger, then it will.

    This idea that we can all force millions of people to do something they are not currently doing is stupid because people, regardless of the level of education, are not as stupid as that idea.

    Get over yourselves, will ya?

    GM is doing what it thinks is best. And it knows more than you do.

  • avatar
    Eye Forget

    Mostly all of you are discussing the merits/demerits of a failed company investing in an emotionally driven consumer purchase for a vehicle that makes little to no economic sense for the consumer, let alone the country’s reliance on foreign oil.

    The July inventory is 110 days. Sounds like the consumer has started to smarten up. Doubtful GM will.

    • 0 avatar
      VanillaDude

      I need a truck.
      There is nothing emotional about that.
      If I can afford it, then I have an economic sense for buying one.
      Your discrimination against truck drivers is based on emotion and no economic sense. Fortunately you are in no position to demand how others meet their transportation needs, because you don’t know what you are talking about.

  • avatar
    Z71_Silvy

    One of my posts from yesterday, which examined GM’s decision to invest in full-sized truck production in the midst of CAFE negotiations and an inventory backlog,

    Funny…I don’t remember any such article when Ford announced they were investing in the F-150 for 2009 and yet again for 2011.

    There isn’t ONE SINGLE reason why ANYONE would question a domestic automaker for investing in their full size truck platform. It is a highly profitable market.

    Of course, if GM announced they were not going to invest in new trucks…there would be an article lambasting them for that decision as well.

    Damned if you do and damned if you don’t.

  • avatar
    TheHammer

    “The profit margins on GMCs are VERY high.”
    In actuality, they are no different than a Chevrolet

  • avatar
    brandloyalty

    How do places such as Europe get along ok without pickup trucks?

    • 0 avatar
      Patrickj

      A cousin of mine owns a farm in Ireland with several hundred acres of hay, cattle, and sheep.

      Last time I was there, this was the largest highway vehicle he owned.

      http://en.wikipedia.org/wiki/Nissan_Almera

      He used a trailer with it and moved most things on the land by tractor. Cattle and heavier materials were transported by hiring a friend with a stake-body truck.

  • avatar
    Rob

    No matter what CAFE noise is being made today or requirements are planned for tomorrow, at the end of the day no CAFE rule will survive that does not allow the Big Three to make a profit – and that means selling highly profitable full-size trucks. Tolerance for CAFE only exists when CAFE is playing catch up to automaker technology instead of the other way around. As soon as that dynamic reverses and CAFE becomes painful, the automakers know that a change in policy is only one election away.


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