In The Midst Of CAFE Negotiations, GM Re-Invests In Trucks

by Edward Niedermeyer

Updated: March 7th, 2023 Published: July 20th, 2011

[UPDATE: GM responds to this piece here]

With environmentalist groups on the warpath over forthcoming 2017-2025 CAFE standards, trucks sitting on lots, and the Flint HD Pickup plant idled for much of the month, this is probably not exactly the moment GM might have chosen to put $328m into tooling for new full-sized pickups to be built at Flint. But time and the market wait for no company, and because the Silverado is GM’s single best-selling product, the investment isn’t tough to justify:

“Truck sales play an important role in the success of General Motors,” said Joe Ashton, UAW-GM Vice President. “We are confident that the next-generation of trucks will continue to be an important source of revenue for the company and jobs for our members

In case there’s any confusion though, GM is making perfectly sure nobody thinks they’re making any product choices because of union demands. At the investment announcement ceremony at Flint, Cathy Clegg, GM vice president of labor relations told Reuters [via Automotive News [sub]]

We certainly aren’t going to make a decision and make a commitment solely as a way of getting an agreement. If the market doesn’t drive it, we can’t do that

So, how is that truck market?

GM’s presser notes

GM’s retail share of the full-size pickup market has grown to 40.4 percent through May compared with 37.7 percent in the first five months of 2010.

That’s not bad at all…but it doesn’t really answer the question. So, how is that truck market?

Not bad at all! From 2008 until well into last year it seemed like cars would pull away from the trucks, but the big boys have staged a comeback. And all the growth has been in domestics too, as import brand truck sales have been stalled since the ’08 downturn. In the short term that’s great for Detroit, but in the long term it’s also the first hint of trouble for the overall market. For more let’s dig into those truck numbers

Here’s what happens when you break those trucks into what they really are: pickups, SUVs and vans. With this breakdown we can see that the pickup market isn’t looking all that solid at all, and looks unlikely to ever return to the 3m+ annual sales levels of its halcyon days. All the growth in “trucks” is coming from SUVs… and you can probably guess what the next drilldown is…

Here’s your roaring “truck” market: car-based crossovers, not body-on-frame dinosaurs. With truck-based SUVs headed back down and pickups going nowhere, the long-term prospects for the next-generation of truck platforms aren’t stellar. Let’s hope GM has seen the handwriting on the wall and will have some forward-thinking surprises for the new full-sizers, because in a market like this they need to keep winning retail share. And because nearly two million annual truck units is worth chasing, because Flint’s big trucks are important to GM’ relationship with the UAW and because the Volt is built for those bankable, swappable CAFE credits, this pickup investment is a no-brainer… for now, anyway.

#Analysis #Flint #FuelEconomy #FutureVehicles #GM #Government #Green #Pickups #Sales #Sierra #Silverado #Trucks

Edward Niedermeyer

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Moparman426W on Jul 26, 2011

A truck is a necessary tool for us car guys. We go to swap meets, car shows, etc. We are always on the lookout for parts and cars, and we more often than not stumble across something that we weren't even looking for, but we just have to have it. For example three years ago we were at chryslers at Carlisle, and my son saw a 60 desoto that he wanted, so we bought it, hooked it up to the ram and brought it home to Ohio. Not long before that I was at a swap meet near my home and found a 392 hemi and bought it. I didn't have anything to put it in at the time, but I always wanted one and whether or not I ever ended up actually putting it into anything I knew it would look cool sitting in my barn. My son decided that he wants it under the hood of the desoto, so that is where it will end up. Hardly a week goes by that I don't come across something that I bring home. I guess it takes a car guy to understand the importance of having a truck

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- Joeaverage on Aug 17, 2011
  
  You are correct. I don't currently own a truck and wish I did each time these gearhead events come along. I have one I can borrow though on short notice. I keep it running, my friend pays for the parts. The Desoto definitely warrants a big tow vehicle. The engine - no really a truck requirement. I recnetly brought home Model-A engine and the front half of the frame, no suspension. Brought it home in my little tin can trailer (Brenderup 1205S) and later carried it to my Dad's house over the hills and 100 miles away. Pulled it with a four cylinder engine too. It's jobs like this that makes me lament the passing of the small truck in the USA (Luv, small Tacoma, small Ranger, etc). Not much of a family vehicle but fine for little weekend jobs. The safety margin the larger trucks offer is hard to ignore though on towing jobs.
  
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Moparman426W on Jul 28, 2011

@nutcase. I drive a truck, my wife drives an suv. We also have a boat that I bought in 1988, and it has been used every summer except for maybe two over a 23 year period. Our house is 1200 square feet, by far the smallest on our street, which is lined with homes between 2000-2500 square feet. The way I look at it I am doing more for the environment than my neighbors.

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