Volt-Talking Obama Bets On Pick-Up Sales

by Bertel Schmitt

Published: December 13th, 2012

volt talking obama bets on pick up sales

The bailout of a Volt-producing GM was sold as an investment into a green future, a liberation from the terrorist-supporting Arabs. We have been fooled. The decisive turnaround of the company could be delivered by a new generation of big, gas-guzzling trucks. If successful, the trucks could help recover at least some of the money the tax payer sunk into GM.

Forget the Volt.

GM “is counting on muscled up, more refined versions of its lucrative Chevrolet Silverado and GMC Sierra full-size pickup trucks to show investors and car buyers the No. 1 U.S. automaker is back on the right track,” says an in-depth Reuters article by its Detroit star reporter Ben Klayman.

Full-size trucks and related SUVs generate profits of $12,000 or more per vehicle and account for about 60 percent of GM’s global profit, analysts tell Reuters. The new models could bring more than $1 billion in additional operating earnings in 2013 and 2014.

GM needs to invigorate its trucks badly. Their last major redesign was in 2006. The 2009 bankruptcy made GM fall behind on development.

GM is estimated to have invested between $3 and $4 billion in developing the new trucks and revamping the plants where they are built. The market share of the Silverado/Sierra has been dropping for year, while the competition by Ford and Chrysler are gaining.

|“Obama’s bet on GM hangs on pickups boosting shares,” says Bloomberg. According to the wire, “the U.S. may sell its remaining 32 percent stake in GM, a holdover from the 2009 rescue of the automaker, if the shares rise. The Treasury wants to sell for at least the $33 a share price it got in the IPO. It needs to sell for more than $50 for the U.S. to break even.”

Currently, GM trades at $25.63, but a pick-up in earnings from the pick-ups is still a while away. Trucks are shown today, but will not hit dealers before the second quarter of next year.

#BertelSchmitt #GM #Trucks

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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2 of 44 comments

Kyree on Dec 13, 2012

I don't see how anyone thought the loss-leader that is the Chevrolet Volt could have become the bread and butter of General Motors so soon. Everyone knows trucks are where the profit is at, at least for now...

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D in the D on Dec 13, 2012

Ah, duh, "building vehicles that people actually want to buy". This piece is pitiful. If people wanted to buy Volts, GM is prepared. Since they actually buy full-sized trucks en masse, this is smart thinking on their part. Should they actually follow the Greens lead and fail? I think not. It is an embarrassment to this site to come out anywhere else on this issue. They need to make money. Plain and simple. What part of that is hard to comprehend?

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