GM gearing up for big ad push for crucial new pickups: executive
The launch of General Motors Co's redesigned Chevrolet Silverado, the most important since the automaker's bankruptcy and $50 billion taxpayer-funded bailout in 2009, is on track and advertising for its full-size trucks should begin in a few weeks, a top GM executive said on Monday.
Mark Reuss, head of GM's North American operations, said the launch of the 2014 Silverado and GMC Sierra pickups is going "really good" and there had been no hiccups to slow the rollout.
Analysts estimate GM has invested $3 billion to $4 billion to develop the new trucks and related engines, and to revamp the plants where they are built. The last major redesign of the trucks was in 2006.
Reuss said advertising for the new big trucks will not begin until there are enough on dealer lots to meet demand.
"We want to match availability with the marketing, so we've still got some weeks before we get everything to everybody that needs it," he told reporters after an event at which he announced the creation of a summer internship program for Detroit-area high school students.
Reuss was comfortable with inventory of about 100 days for current truck models and said that was not too high.
The trucks are a linchpin in GM's ongoing battle with No. 2 U.S. carmaker Ford Motor Co , whose F-150 truck is the auto industry's top-selling vehicle.
The current versions of the big trucks and related SUVs generate profit of $12,000 or more per vehicle and account for about 60 percent of GM's global profit, according to analysts. Citigroup has estimated the new models could bring the automaker more than $1 billion in additional operating earnings in 2013 and 2014.
Reuss also said on Monday he was not concerned that the softening Japanese yen could lead to rising incentives across the industry.
"Everybody wants high-quality sales, not sales at all costs," he said.
Reuss expects GM's May U.S. sales to be up from last year and he remains unconcerned at this point about the industry's weaker-than-expected sales in April, saying it was just one month of results.
"There's some optimism out there," he said.
Reuss also agreed that GM topping the $33 price at which the company returned to the stock market in the fall of 201 was a positive psychological point. He added that, if the city of Detroit seeks bankruptcy protection, it will not affect GM financially or operationally.
(Reporting by Ben Klayman in Detroit. Editing by Andre Grenon)