The next-generation of GM's full-size SUVs—the Cadillac Escalade, GMC Yukon, and Chevrolet Suburban—will all launch next year and their importance cannot be understated.
GM
CEO Mary Barra confirmed the new versions of the profitable trio will
come to market in 2020 but would not give exact timing, nor would she
say if they will be delayed somewhat by the six-week UAW strike that
recently ended with the ratification of a new four-year labor contract.
The big SUVs are much anticipated. Ever since Lincoln put out its new Navigator, expectations have been high for the 2021 Cadillac Escalade. Executives have promised the fifth-generation car will be worth the wait.
GM needs to get them right. These large, body-on-frame, three-row SUVs are critical to GM's bottom line
and their profits help fund the high-tech electric and autonomous
vehicle development that's already underway. They are also crucial
because of their iconic nature; they help define their brands. The
blinged-up Escalade became the company's flagship at a time when other
brands had large sedans in that role. The Escalade also made Cadillac cool, and the brand needs an injection of that as it struggles to rebuild its portfolio and reputation.
There has been criticism that the styling of the smaller three-row Cadillac XT6 crossover is bland when compared with its Lincoln Aviator
counterpart. But some compromises were made during XT6 development,
which shares its underpinnings with the XT5. The new Escalade has had
high priority status and the resources that come with it.
The
giant grille on the 2021 Escalade, as revealed in spy shots, shows a
family resemblance to the new CT4 and CT5 sedans. The hope is the
Escalade's exterior will be more dramatic than the XT6 and that interior
design and materials will be dramatically improved over its smaller
brother.
There will be more than one powertrain, including an updated version
of the 6.2-liter V-8 that's already in the flagship Caddy. Early plans
to give the Escalade the 4.2-liter twin-turbocharged Blackwing V-8
engine were shelved. Performance or V versions of the Escalade are
expected to have a version of GM's 6.2-liter supercharged small block
V-8. Spy shots have revealed paddle shifters on the steering wheel for
the first time in the Escalade.
We expect the addition of motors
and batteries at some point since GM has designated Cadillac as their
leading brand for electrification. Barra said GM, overall, will spend
more on vehicles with electric powertrains than combustion engines over
the next five years with the goal of being the automotive leader in
electric vehicles.
The Escalade will also have Cadillac's Super Cruise, the hands-free cruise control system for highway driving.
Once again there will be regular and stretched versions of the
Escalade, Yukon and Suburban. The launch will be complicated with
downtime at the plants in the first quarter of next year to retool for
vehicles that have been changed significantly from their predecessors.
Confirmation
of the rollout of the big SUVs came during GM's third-quarter earnings
call with investors. In addition to some possible tweaks to launch
timing—the new Chevy Corvette might also launch a bit later than planned—the
six-week strike will cost GM almost $3 billion in lost earnings over
the course of the year, with the first $1 billion in losses already in
the books.
The fourth quarter will be worse because the strike,
which started Sept. 16, led to the shutdown of U.S. plants, and idled
many operations in Canada and Mexico before employees returned to work.
The new four-year contract includes signing bonuses, pay increases,
preserves benefits, and allows for more part-time workers to become
full-time.
The agreement is estimated to increase GM's annual labor costs by
$100 million but allows the automaker to close plants in Lordstown,
Ohio, Warren Transmission in Michigan, and Baltimore Operations in
Maryland. But plans to close the Detroit-Hamtramck plant near Detroit
were reversed and GM instead is investing $3 billion to build electric
pickups, vans, and battery modules there as part of a larger promise to
invest $7.7 billion in U.S. factories over the next four years.
GM
reported $2.3 billion in earnings in the third quarter, which is down 9
percent from the same period in 2018. Revenue declined slightly to
$35.5 billion. While the strike hurts the bottom line
now, and overall labor costs will increase, Barra said the goal was to
reach an agreement that is good for employees without compromising the
future of the company and shareholder value. She said she feels this
deal does that.
GM will look for ways to further cut costs to pay
for the decision to keep the Hamtramck plant open, and while most plants
are at capacity they will try to find ways to make up for lost
production during the strike.
Heavy-duty pickups with crew cabs
launched during the third quarter and the rollout will continue with
double cabs to be added next, followed by regular cab.
