GM to Invest $1 Billion in Trucks

January 18th, 2010

2009 GMC Sierra

General Motors announced late last week that it intends to invest nearly $1 billion to overhaul and redesign its truck line, a move that places a hefty bet on America’s willingness to return to pickups.

During the 1990s, GM trucks were a huge source of profit, a fact that led the company to focus on producing them instead of building more fuel-efficient small cars.

That market, of course, collapsed with the economy, $4 gas, and GM’s bankruptcy. Now that the federal government owns 60 percent of the company, it is demanding that GM invest in small cars like the Cruze and battery cars like the Volt. That’s still happening, and by some miraculous act of the truck gods, GM has found $1 billion to overhaul the ol’ Silverado and Sierra.

Now, some folks out there might be outraged that the General took government money and now appears to be headed right back down the same path that got ‘em in trouble in the first place. But I disagree, and think this is a good move on GM’s part. Here’s why:

First of all, I’ve said before that GM makes one heck of a good truck and will probably emerge as a niche automaker making them. Second, when sales numbers of the Silverado and its twin Sierra are combined, they handily beat the Ford F-150‘s sales numbers. The truth of it is, if GM wants to make money and pay the government back, it has to invest in trucks or risk falling way behind Ford and Ram.

Plus, new technology will result in better fuel economy in trucks. Under new federal fuel-economy mandates, GM’s truck lineup must average 24.1 miles per gallon by 2011. GM’s biggest trucks and SUVs won’t reach those numbers, but GM’s smaller, more fuel-efficient models, like the Chevy Traverse, Equinox, and GMC Terrain, will.

Since the last major overhaul of GM’s trucks was in 2006, the time is right to invest in their next generation.

I think American consumers are ready to buy trucks again. Do you?

-tgriffith

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  1. Assie
    | #1

    Living in Austrayia, one of the biggest selling cars here is the Hilux by Toyota. The competition (Mitsu, Nissan etc.) all do quite well in the truck sales dept’ also. It still amazes me that a lot of US cars don’t seem to make it outside of the US to make money. If the Silverado were to get sold here, I’m sure it’d squeeze into the truck (we call them Ute’s) money flow quite well. Instead GM insist on selling the rest of the world inferior Korean made trucks – sif I’m buying a Korena truck !. So Hilux..here I come.
    These US trucks really need to be sold more globally instead of limiting themselves to the US market. The Japanese realise this, and now one of the first markets for the VW Amarok is Australia….then “Global”.
    If I were to pick the one thing that the US carmakers do poorly compared to The Euro’s and Japanese, is selling the US designed/made cars globally. Pretty much every car made by the Asian/Euro car makers is sold around the world, whereas the US concentrate their cars for US markets only (hello ‘Vette, Camaro, ‘Stang, Caddie’s, Trucks in general….)

    my rant….

  2. dave
    | #2

    GM will only sell me a new pickup IF, and only if, it can offer a model to replace my aging Chevy S-10. No one presently builds a standard cab 2WD V6 powered pickup that weighs about 3000 lbs and gets 25 mpg.(hwy) They are all too big, to heavy, and burn too much fuel and/or are underpowered to achieve similar fuel economy.

  3. randy
    | #3

    You sure can tell when Bob Lutz is making decisions, can’t you? They will piss away $1000,000,000.00 (thats a billion, folks) developing overpriced trucks that get Bob’s idea of BIG Mileage (22 highway) only to find gas prices hitting $5 a gallon or higher as the world recession eases. Perhaps that’s why the truck of the year was Fords smart little city truck. Do you know how to turn $500 billion dollars into squat? Give it to Bob Lutz and the government.

  4. | #4

    Just gas axe all the bullshit behind the front doors on the cab off and install a deck or pickup bed chuck a decent diesel under the hood and toughen up the suspension thats a truck not the child friendly crap thats built now. Wheres my billion?

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