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Just about now, we should
be reading the first stories on the sales of the new GMT900 trucks.
That is the designation
for the General Motors truck platform replacing the GMT800, starting now. The
vehicles built off this platform include the Chevy Silverado and GMC Sierra
fullsize pickups; Chevy Avalanche, Suburban, Tahoe; GMC Denali, Yukon and
Cadillac Escalade SUVs – even the Hummer H2. They are being phased into
production now, SUVs first.
Watch for words like
“disappointing.” You will read the new GMT900 may not be able to save
GM. But don't worry.
The new SUVs and the
pickups that follow in another year will do just fine. They are much improved,
with better fuel economy, handling, fit and finish. But too much is being
expected of them.
They won't single-handedly save GM. Sales won't match the volumes of a few years
ago, when they soared to more than 1.5 million just in the U.S. I doubt 2006
sales will be able to equal last year’s 1.4 million units, and they could drop
again in 2007.
The old GMT800 did save GM – absolutely. It’s possible the auto maker
would be out of business now but for that platform. Look at total North
America production, according to Ward’s data:
Those volumes are incredible. At 1.8 million, with a $5,000 pre-tax profit
per vehicle (my estimate) that is a $9 billion profit! If GM had another
platform that profitable, there wouldn’t be any speculation about bankruptcy.
If it had two more platforms like the GMT800, Democrats would be demanding we
break up GM.
What happened to the money? GM lost it everywhere else in North America,
but that platform still saved the company.
Unfortunately the market growth isn't in big, body-on-frame vehicles anymore. Fuel
prices are playing a role in the decline, but more likely they have just run
The growth is in smaller models and cross/utility vehicles. There's much more
competition, too. Nissan is selling 85,000 big Titan pickups a year and
not just to folks who never before owned a pickup. Some conquests are from
When Toyota cranks up its new Texas fullsize pickup plant, some of those
sales will come out of GM’s hide, too. The new Mercedes R-Class and
GL-Class CUVs swill grab some customers that might have bought Cadillac
With the market shift and new competition, profits slide. Prices get chopped, or
dollars are put on the hood. That's just the way it is.
GMT900 still will be the highest-volume platform at GM; it just won't come
close to past years' volumes.
Over time, the new trucks should help stabilize GM's falling market share and
transaction prices. But GM’s new cars and CUVs have to come on real strong
behind these big boys.
If the present management can't show signs of a turnaround soon, expect a change
Jerry Flint is a columnist for, and a
former senior of, Forbes
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