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New pickup GM’s ‘Super Bowl’

Revamped Silverado takes on Ford, may get US to sell stake

– General Motors’ best bet for 2013 may also provide the Obama administration an exit ramp for its $50 billion investment in the largest U.S. automaker.

With Thursday’s unveiling of its first redesigned Chevrolet Silverado full-sized pickup since 2006, GM aims to confront Ford head-on with new trucks that could help boost its share price, encouraging the U.S. government to sell its stake.

GM’s Silverado and GMC Sierra pickups, mechanically similar models that combined to made up 23 percent of the Detroit-based automaker’s U.S. sales last year, generated an estimated 16 percent of the company’s global earnings before interest and taxes this year, and the redesigned versions could boost that earnings figure by more than $1 billion in 2013, according to a Citigroup estimate.

Even with the recent cloud of high existing truck inventories, the new models hold the promise of giving GM’s investors, the U.S. government included, a long-awaited boost.

Introducing a new pickup “tends to correlate very well with positive stock returns” for GM, said Itay Michaeli, an analyst with Citigroup. Since GM’s initial public offering in November 2010, “there was high anticipation already then for the 2013-2014 truck launch.”

Of 13 new Chevrolet vehicles introduced next year, the Silverado will do more than any other model to help boost sales and profits, which analysts project will increase next year.

“It’s really hard to find a product for GM that’s more important,” said Rebecca Lindland, an industry analyst with IHS Automotive. “From a volume and financial standpoint, this is GM’s Super Bowl.”

The U.S. may sell its remaining 32 percent stake in GM, a holdover from the 2009 rescue of the automaker, if the shares rise.

The Treasury wants to sell for at least the $33 a share price it got in the initial public offering in November 2010, people familiar with the matter have said. It needs to sell for more than $50 for the U.S. to break even.

GM has long battled Ford for pickup buyers. Ford’s F-Series, which was redesigned in 2008, has been the best-selling vehicle in the U.S. for 30 consecutive years.


General Motors Co. is investing $275 million in equipment and construction to outfit its Allen County truck assembly plant to build the next-generation Silverado and Sierra. Production is slated to start in 2013.
GM spokeswoman Stephanie Jentgen on Thursday said she can’t say what day the new model will start rolling off the local assembly line. She didn’t explain why.
The factory employs more than 3,600 on three production shifts.
– Sherry Slater, The Journal Gazette

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