GM Drops Cruze, Impala, Volt, LaCrosse, XTS, CT6

[silvrsvt]

23 minutes ago, bzcat said:

Volt sales has been in dire straights ever since Bolt came out. Volt was largely sold in California only and the buyers clearly prefers EV. Compact PHEV doesn't make that much sense because you end up driving in EV mode most of the time... PHEV still makes sense in larger vehicle where EV range is limited due to weight. I'm honestly surprised that GM didn't make the 2nd Gen Volt into a CUV... basically add 1" suspension lift and square back instead of the fastback. Kia figured out the package and executed just right for Niro as a CUV (even though it is really just a hatchback), while Ford and GM both missed the mark with their PHEV C-Max and Volt.

I think the problem was they where following the trend of the Prius-which looked different and drew attention because of that. But what it boiled down to is that peoples tastes changed and they don't care if it looks "uqine" and its an EV. 

[Assimilator]

Ford knows better than to bank on trade deals when planning its next products.  I doubt GM is expecting a trade deal to guarantee the future of the CT6 and LaCrosse in only a few months, but it's possible GM would still be willing to eat the costs of tariffs (Ford would never).  And the Cruze is being dropped in favor of a new Crossover to be built in Mexico, it's all so shockingly similar to what Ford is doing.  

Edited November 26, 2018 by Assimilator

[mackinaw]

1 hour ago, Assimilator said:

The Midsize truck market is NOT big or growing significantly, especially compared to the other truck businesses which Ford has smartly prioritized.  Ford is still only planning one shift for Ranger production.

Some of these segments can get sales, but getting profitable sales alongside inefficient production capacity better utilized for other products is the trick.  

From USA Today about the mid-sized truck market:

 

Midsize pickup sales through the first 10 months of the year are up 17.6 percent to 438,612, outpacing the overall industry's 0.6 percent increase during that stretch, according to Kelley Blue Book.

 

The segment has already doubled in size over the last four years, as measured by industry market share, from 1.5 to 3 percent, according to IHS Markit.

Midsize pickup sales are expected to increase by 50 percent over the next five years, according to LMC Automotive's David Franklin.

 

https://www.usatoday.com/story/money/2018/11/26/midsize-pickup-trucks-la-auto-show/2052895002/

 

 

[bzcat]

GM will probably stock up on CT6 and Lacrosse before production ends in the middle of next calendar year. That takes care of model year 2019 and 2020 sales.

Then it is the waiting game on tariffs until the clock runs out for 2020 model year. That's plenty of time for things to get resolved for the current gen Lacrosse and CT6 if GM wants to import either of them from China in model year 2021.

Next gen is a bit more hazy... there is probably no reason to keep selling Lacross in the US but I think Cadillac may try to keep CT6 around as long as it can import it from China.

Edited November 26, 2018 by bzcat

[Assimilator]

Buick doesn't need the fading LaCrosse in the US, but it does need more utilities.  Caddy has a new lineup of sedans arriving, including one based on the Escala concept so it's likely they have a succession plan that doesn't involve the CT6 anyway.  I think importing from China has been completely erased from any future product planning.  Gambling your money on the outcome of trade deals is bad business.  

Edited November 26, 2018 by Assimilator

[Assimilator]

Mary Bara confirmed the CT6 and Cruze were being discontinued from North America with no plans to import them from China/Mexico.  

Associated Press

Quote

Among the facilities on the chopping block are the Detroit/Hamtramck assembly plant, which makes the Buick LaCrosse, the Chevrolet Impala and Volt, and the Cadillac CT6, all slow-selling cars. LaCrosse and Chevrolet Volt plug-in hybrid production will end March 1, while CT6 and Impala production would stop June 1.

Barra said the Cruze would no longer be sold in the U.S. Production would stop March 1.

Work on six-speed transmissions made at the Warren, Michigan, transmission plant would stop Aug. 1, while the Baltimore transmission plant would stop production April 1, GM said.

GM said it was ending Volt production because the vehicle was meant to be a bridge to fully electric cars when it was introduced about a decade ago. The Volt has a small battery that can take it about 50 miles, then it switches to a small gasoline engine.

Since it was introduced, battery technology has improved dramatically. Now the full-electric Chevrolet Bolt can go up to 238 miles on a single charge.

Meanwhile, GM’s plant in Oshawa, Ontario, will stop making the Impala, Cadillac XTS and 2018 full-size pickups in the fourth quarter of next year. The Canadian plant appeared to be most in danger of closing.

 

Edited November 26, 2018 by Assimilator

[rmc523]

24 minutes ago, Assimilator said:

Mary Bara confirmed the CT6 and Cruze were being discontinued from North America with no plans to import them from China/Mexico.  

Associated Press

 

That quote doesn't say that regarding CT6.  Maybe she did say that, but not in that quote.

Just surprising, though if there's an Escala replacement on the way, it makes more sense.

[Assimilator]

It was in another Associated Press quote, although I saw it quoted on GMI and haven't been able to find it again.  

[AGR]

I saw an article on Autoblog or one of the other sites about a week ago that Toyota may not be too far behind with cuts. Prius-C, Yaris, and 86 might be, 86ed. Avalon is like all fullsize sedans, selling slowly. The regular Prius is safe...for now.

[justins]

Looks like massive shifts are occurring throughout the entire market and manufacturers are catching on. Unlike pre-bankruptcy, automakers have picked up on trends earlier and are making tough choices, rather than continuing to churn out hundreds of thousands of vehicles no-one wants, and then have to discount them. 

[akirby]

Ford is ahead of the curve and the analysts talk doomsday.  They’ll be applauding all the other car makers who do the same thing just because they’re not Ford.  And they’ll never admit that Ford was right.

[Assimilator]

I think the difference with GM is that it's much more profitable and will become immediately more profitable by cutting.  Ford isn't as profitable and not talking about job cuts which is the only thing investors understand.  So they are punished when they talk about cutting products for new products and spending money to invest, never-mind they are transitioning without killing plants or jobs.  This is why I was so excited by Ford's huge car-cull, it was clear leadership and innovation that points the way forward in no uncertain terms, and here we are now with GM following in a much more uncertain way.  

[rperez817]

36 minutes ago, akirby said:

Ford is ahead of the curve and the analysts talk doomsday.  They’ll be applauding all the other car makers who do the same thing just because they’re not Ford.  And they’ll never admit that Ford was right.

Ford did the right thing discontinuing its sedans in the U.S. market. Analysts recognized this. Adam Jonas from Morgan Stanley said "Virtually eliminating Ford's NA car portfolio makes a lot of sense, in our view". Jessica Caldwell from Edmunds and Sam Abuelsamid from Navigant said similar things.

GM is similarly wise as it pares down its sedan lineup in the U.S. and addresses low utilization at some of its U.S. and Canadian plants.

[mackinaw]

1 hour ago, Assimilator said:

 Ford isn't as profitable and not talking about job cuts which is the only thing investors understand.  

Of course Ford is talking job cuts.  All salaried positions.  Morgan Stanley figures it could be as high as 20,000.

 

https://www.bloomberg.com/news/articles/2018-10-05/ford-prepares-to-cut-salaried-jobs-in-11-billion-restructuring

[Assimilator]

Ford isn't, Morgan Stanley is.  

[jpd80]

13 hours ago, akirby said:

The only reason we have Ranger is Bronco.  They need it to fill out the plant.  Or vice versaTogether they make sense.   

The other reason is that F series is close to maxing out plant capacity so splitting off some Ranger sales won’t hurt.

As for the midsized market - GM grew the market with Canyorado and I think Ranger will do the same.  It’s a finite market for sure but it’s not shrinking and there is room for new players contrary to what we all thought a few years ago.

 The timing of the request for Ranger was interesting, deep into the final refresh on the current product cycle. Normally Ford would tough it out and start on a next gen product cycle - as Bronco will be. I suspect that Ford really wanted a foot on the door but also saw what GM did with selling Colorado/Canyon SuperCrew sales - nice and profitable....right about the time decisons were being made on NG Focus..

I do like Ford's plans - Ranger replaces Focus production at MAP, Aviator replaces Taurus production at CAP and Maverick replaces Fiesta production.

[snooter]

Who cares..may be if they built something we wanted like a 500plus hp trans am we might have been inclined to stop by a chebby dealer....as it stands many of us are across the street looking and droolin over the new taco's....

[Kev-Mo]

20 hours ago, akirby said:

Toyota and Nissan stayed in the market because they were selling the same midsized trucks here that they were selling worldwide and less competition meant less price pressure.  It was more a case of “it doesn’t cost us anything to stay here” rather than “we see a comeback”.

You guys are marginalizing a significant legitimate segment dominated by Toyota.  Somehow they can produce and sell products that people want year after year AND make money.  You can say all day long that the Tacoma is not re-designed and is really nothing special - I don't dis-agree, but you can't deny how well they sell.

[rperez817]

9 minutes ago, Kev-Mo said:

You guys are marginalizing a significant legitimate segment dominated by Toyota.  Somehow they can produce and sell products that people want year after year AND make money.  You can say all day long that the Tacoma is not re-designed and is really nothing special - I don't dis-agree, but you can't deny how well they sell.

Well said Kev-Mo sir. I don't like Toyota Tacoma or Nissan Frontier (the Toyota has uncomfortable seats for me, the Nissan is just old and tired). But both automakers were very smart to recognize that the demand for midsize pickup trucks in the U.S. never "collapsed". And that customer demand for these trucks was always there. In the early 2010s, the sales that used to be divided among 5 makers all went to Toyota and Nissan when GM, Ford, and FCA abandoned the segment. 

GM changed that when it introduced the new generation Colorado in 2015, and Ford is now joining the club with Ranger. I'm glad they both came back to the fast growing U.S. midsize pickup segment. My next truck is a 2019 Ranger XLT (already pre-ordered). ?

[akirby]

22 minutes ago, Kev-Mo said:

You guys are marginalizing a significant legitimate segment dominated by Toyota.  Somehow they can produce and sell products that people want year after year AND make money.  You can say all day long that the Tacoma is not re-designed and is really nothing special - I don't dis-agree, but you can't deny how well they sell.

Nobody is ignoring them - they are the market leader.  But you can’t deny that they haven’t made any real investment in Tacoma in a couple of decades.  The new Ranger has more power than the Tacoma V6 and gets better fuel economy than the Tacoma I4.  And Ranger offers more features.

 

Toyota is the one that should be worried.

[rmc523]

14 hours ago, Assimilator said:

Ford isn't, Morgan Stanley is.  

Wingsnut over at FIN posted this this morning.....trying to find out where he got it from.  The title of his post said "Ford Statement on Business Transformation"

Editor's Note: As you may have seen, today General Motors made an announcement regarding the future of their company. This sparked interest from the media and other shareholders about the progress of our own transformation over the last 18 months. In order to be helpful, the communications team put together an overview of the transformation that we have been undergoing and posted it to the Ford media site. You also can find that update below. 

Ford has been working intensively and taking action to transform our business over the past 18 months. As we redesign and restructure our global business, we will build on our areas of strength; smartly and strategically address underperforming products and regions; and invest in the future by designing smart vehicles for a smart world.

Key actions include:

-Updated footprint: We announced in July that restructuring activities could have potential EBIT charges of $11 billion, with cash-related effects of $7 billion, over the next five years. These actions will come largely outside of North America.

-Transforming Product Development: We announced nine months ago that we are shifting to five flexible architectures for our vehicles -- driving a 20 percent savings in time from sketch to showroom and yielding significant efficiencies. As part of this, we've also identified ways to manage up to 70 percent of each vehicle's value through increased component sharing. We also formed a new Enterprise Product Line Management group, which establishes 10 cross-functional teams that will manage distinct product lines as end-to-end businesses and leverage Ford’s human-centered design, advanced product marketing and user experience teams to create breakthrough products and customer experiences.

-Shifting Vehicle Portfolio: We've already taken actions to shift our vehicle portfolio to better meet our customers' needs going forward and strengthen our business, improving returns. This includes moving approximately 90 percent of our North American vehicle lineup volume to SUVs, pickup trucks and commercial vehicles between 2018 and by the end of 2020. The company is phasing out slow-selling traditional sedans to free up capital for new entries in growing segments.

-Strong investments in Autonomous and Electrified Vehicles: Ford’s fitness actions are freeing up capital to invest in emerging businesses. Ford expects to invest $4 billion in its AV efforts through 2023, including its $1 billion investment in Argo AI. In addition, Ford is investing $11 billion in electrification from 2015 to 2022 to deliver a total of 40 vehicles globally. The company remains on track to deliver a full battery electric performance SUV that offers at least a 300-mile range in 2020.

-Capacity Utilization: Ford has the best manufacturing capacity utilization in North America based on the aggressive restructuring we completed a decade ago, including our use of industry-leading three-crew operating patterns and our continued discipline around balancing capacity with consumer demand, as we have for years.
Organization Redesign: We are in the early stages of reorganizing our global salaried workforce to support the company’s strategic objectives, create a more dynamic and empowering work environment and become more fit as a business. The reorganization will result in headcount reduction over time, and this will vary based on team and location. 

-Strategic Alliances: We are in talks with both Volkswagen and Mahindra about potential collaborations across a number of areas of our business. We are encouraged by both sets of talks and continue working to ensure these alliances help us better serve customers globally.

[rperez817]

3 hours ago, akirby said:

Toyota is the one that should be worried.

I agree. Toyota did a major redesign of Tacoma for 2016. New frame, cab, suspension, V6 engine, transmission, bed, etc. But they messed up in some ways with the new gen Taco. The truck is still very crude. Ride and handling are barely any better compared to the previous gen. And the new 6-speed automatic transmission has been troublesome. Overall reliability is worse than past Tacomas.

Toyota is coasting on Tacoma's reputation for sturdiness and durability. That won't last, especially if the transmission, seat comfort, and other problem areas with the truck aren't addressed. 

[bzcat]

I find it ironic that XTS will outlive the CT6 in North America.

[akirby]

49 minutes ago, bzcat said:

I find it ironic that XTS will outlive the CT6 in North America.

A lot of us tried to point out that Caddy buyers wanted the XTS and not the new CT6 but the GM fanbois said we were crazy.

[jasonj80]

This is political posturing but also goes with the public mood of late.  http://www.thenewsherald.com/news/camilleri-abruptly-calls-for-end-to-tax-breaks-for-gm/article_cffa517e-f265-11e8-8c54-d33c5162487b.html and https://www.cnbc.com/2018/11/27/general-motors-shares-fall-after-trump-threatens-to-cut-subsidies-for-company.html

I thought Ford was bad at PR; this is a disaster. Day two and they still own all the headlines. It also can't make anyone in the industry happy as this is going to dominate the LA show coverage rather than new models being shown.