Former General Motors executive Bob Lutz continues to keep one hell of a pulse on the automotive industry and spoke to CNBC’s “Closing Bell” to give his take on a handful of hot-button pieces of GM news.
Overall, Lutz said he expects GM will remain very profitable in the foreseeable future as cost savings from “unpopular decisions” begin to rack up. Think GM’s exit from Europe, India, and end of local production in Australia. Additionally, Lutz said GM’s new-vehicle pipeline is full and everything on the horizon will strike at the core of the market.
GM enters its first full year of sales for the redesigned 2019 Chevrolet Silverado and GMC Sierra, which are major mone makers. This year, we should see the 2020 Chevrolet Tahoe, GMC Yukon, and Cadillac Escalade debut. Again, each model generates significant profits.
“Unless we have some sort of economic Armageddon, either here or in China — which I don’t think anybody expects — I think the company is exceptionally profitable right now and will continue to be so for the foreseeable future,” he said.
Lutz also touched on the recent announcement that GM will idle four auto plants in the U.S. While he acknowledged the decision is never an easy one and creates a lot of emotion, he underscored the fact that plant closures are part of the business and a market-based economy.
“But if you don’t [close plants], companies die. And nobody benefits from that, either” Lutz added.
The former GM executive also believes GM is best positioned to weather the changing auto industry, thanks to its acquisition of Cruise Automation and other ventures like Maven. He noted GM also knows what it’s doing in the electric-car space and expects the next round of EVs will be second to none.