There’s No Pickup Like a $50,000 Pickup From The Motor City
February 3rd, 2014, 8:41 AM
I was amused upon moving to the Detroit area that no small number of people who barely knew me advised trading my Toyota Camry to buy a Thunderbird, Lumina or New Yorker as proof of loyalty for my new home town.
Fast forward thirty years. I now drive a car built in the U.S. by American workers, albeit one carrying the name of a foreign company. Detroit-based General Motors Co., meanwhile, is recovering from bankruptcy. Dearborn, Michigan-based Ford Motor survived a close brush with financial disaster.
Chrysler arguably isn’t a U.S. or a Detroit company any longer, bankruptcy having driven it into the arms of the Italian automaker, Fiat. Chrysler’s government-financed rescue has led to the birth of Fiat Chrysler Automobiles NV, newly incorporated in the Netherlands.
I hope none of these automakers holds me (or any consumer) responsible for the troubles they’ve struggled to survive.
Happily, GM and Ford, the two remaining thoroughbred Detroit automakers, are on the mend. Quarter by quarter they gain financial strength, each introducing a string of new models, each more impressive than the last. As Detroit and the region attempt to diversify from a disproportionate dependence on the auto industry, GM and Ford stand tall as preeminent contributors to the local economy.
A close look at GM and Ford reveals that they’re essentially domestic pickup truck companies. Both
automakers earn most, if not all, of their profit in the U.S. and a lopsided chunk of that profit from full-size pickup trucks and variants like the Chevrolet Tahoe and Ford Expedition that are manufactured on pickup platforms. I was fortunate this past week to travel to Arizona to test GM’s new heavy-duty pickups, the Chevrolet Silverado HD, above, and GMC Sierra HD, right.
Heavy duties are to regular pickups what a Denver Broncos linebacker is to one from the University of Michigan. Both are impressive: but the heavy duty, like the NFL linebacker, is bigger and stronger and can haul or tow more weight than the conventional full-size pickups. GM’s new versions are impressive, designed to contend against Fords Super Duty and the Ram Heavy Duty, Fiat Chrysler’s workhorse.
Toyota and Nissan build full-size pickups, too. Their models, the Toyota Tundra and the Nissan Titan, have captured only a small sliver of the U.S. full-size market, so far. Pickup buyers in the U.S. are incredibly loyal to their brand, rarely deviating from Ford, Chevy or Ram. Neither Japanese automaker so far offers a heavy duty version.
A larger point about all three pickup lines, Fiat Chrysler’s Ram, GM’s and Ford’s, is that they’re absolutely vital to the health and viability of the three automakers. Ford, GM and Fiat Chrysler make little or no profit on cars. By contrast, pickups – especially those loaded with optional equipment and costing $50,000 or more – can yield more than $10,000 of operating profit per unit.
Detroit automakers, fully cognizant of their dependence on pickups, are striving to achieve more balance, to make their cars more competitive. But they’re not neglecting to protect and defend their bread-and-butter franchise. That’s why it was reassuring to see GM’s new heavy duties perform so well in a variety of real-world tests this week, such as hauling 10,000-pound trailers up and down steep mountain highways north of Phoenix.
If you want to support the home team and prove you’re loyal to the home team, don’t buy one of Detroit’s cars. Buy one of its pickups.