Did GM Make a Profit on the 63 Corvette?

[Thomas S.]

With all of the running changes that occurred with the 63 model, did GM make a profit on that model year's production?

[Duke W.]

Re: Did GM Make a Profit on the 63 Corvette?

The answer is likely yes. In addition to the '63 model sustaining engineering costs there were also changes in the works for '64 before the '63 even entered production. Sales nearly doubled from '62, which means revenue about doubled, but so did most expenses because the plant ran two shifts all year.

I recall reading somewhere that the Corvette didn't make a profit until the early sixties, but "profit" can be squishy depending on the accounting system, specifically how costs are allocated between "expenses" and depreciable/amortizable "investments", like tooling. Likely Corvette used the same production accounting system as other product l lines, so management had a clear idea of Corvette's financial performance.

The Corvette was certainly "on the bubble" in the mid-fifties, when sales dropped to miniscule levels, but Duntov with the support of Ed Cole kept it alive, and financial performance steadily improved in the late fifties. Certainly the major investment required to bring the '63 model into production indicated that management had faith that Corvette would ultimately be profitable and remain a "halo car" in the Chevrolet product line.

I believe the highest profit margin current GM vehicle is the Cadillac Escalade, which is nothing more than a gussied up Tahoe station wagon body on a pickup truck frame - solid axle and all for nearly $100K. Back in the seventies it was called "badge engineering", but nobody seems concerned with that nowadays. The Tahoe/Yukon is the favorite among all the soccer moms in my 'hood and their friends, and I know of at least one Escalade.

Duke

[Ken A.]

Re: Did GM Make a Profit on the 63 Corvette?

GM's accounting system would show no profit from NA operations. All profits came from GMAC and European operations, in the past. Today, who knows?

[Larry E.]

Re: Did GM Make a Profit on the 63 Corvette?

Duke: Back in the seventies it was called "badge engineering", but nobody seems concerned with that nowadays.> Not everybody Duke;not everybody.

JMHO: With some of things GM has pulled off I sometimes wonder that "Profit" and "GM" is an oxymoron. Let's recap some of their fiasco's>

Let start with creating a new full blown division>Saturn>Remember? It was one of the dumbest idea's ever. All it did was to cannibalize
the Chevrolet Division-No new total market share ever developed.

Keeping two full blown truck division today. GMC could easily be run under the Chevy Division and money could tbe saved

How many times have they tried to get another division to have a 2 seat auto; all failed and money down the drain

Giving Cadillac a manual transmission and H/P L/S engine is like giving putting a major league bb player into a little league.
The above sales is so low is laughable. Again>Money down the drain

Having Cadillac compete in a race (WeatherTech Series) is silly. All they did was to take the Chevy Teams with their knowledge
and "rebadge" that makes no sense. Again>Money down the drain

They went broke and belly up for having a "Each Division Get Everything the Other Have" thinking. I'm afraid it still exist today.
There are plenty more fiasco's but I do not want to bore you. Again JMHO-Larry

[Duke W.]

Re: Did GM Make a Profit on the 63 Corvette?

Ah, come on, Larry. I'm sure at least half of all Escalade buyers willingly plunk down their hundred grand because Cadillac races in the WeatherTech series.

I agree with most of your analysis. I think the GMC truck brand is still around because Buick dealers need pickup and SUV sales to stay in business. GM should probably consolidate down to the Chevrolet and Cadillac brands. I think Toyota is the world's biggest vehicle manufacturer in terms of both units and revenue, and they only have two brands - Toyota and Lexus - or whatever they call the latter in other markets. They recently dropped the Scion brand, likely due to the same experience as GM had with Saturn.

Back in the day people tended to "look down" at Chevrolets because they were "cheap" cars. Driving a B-O-P or, the ultimate, a Cadillac, better reflected your station in life, but times changed. Nobody looks down on a Tahoe as a "cheap car", and they are certainly not cheap as typically optioned.

As a guy who has always driven small sedans and sports cars I tend to denigrate big SUVs referring to them as "tanks" and "battleships", but a couple of times a year I drive my neighbors across the street to the airport and pick them up in Carrie's Tahoe. It's a bit of a tight fit with three adults, three young kids in car seats, and all their gear, but it works. I've even borrowed it (or Mike's Crew Cab Chevy pickup) to get some lumber at Home Depot. It's always great to have good neighbors with a big SUV or pickup.

I have to say that both seem fairly "luxurious" with all the modern bells and whistles that people expect, nowadays. They certainly don't look or feel "cheap". But the biggest surprise is how quiet and well riding they are. The basic architecture is no different from a fifties vintage pickup, but modern engineering has allowed manufacturers to refine them immensely over the years despite the fundamentally crude architecture.

I don't think Carrie cares whether her Tahoe has a solid axle or a multilink IRS or is unibody or body-on-frame architecture. She loves it the way it is. One of her friends down the block recently traded her X5 for a new Yukon after bearing her second child. She needed more room and liked the idea of upgrading from a cruiser to a battleship.

Duke

[Darryl D.]

Re: Did GM Make a Profit on the 63 Corvette?

From 1956 on Chevrolet had a winner with the Corvette. Prior to that it was a possibility they would discontinue producing the car due to losses.
All the talk of engineering cost is baloney. The engineering staff were on salary and were paid regardless and even if they were Corvette exclusive (likely not) they would be switched to another project. All the talk about the car being the company flagship means nothing, if the car would have failed GM would have put their efforts into another product for image. GM is a for profit corporation and if they were not making money on it they would have discontinued it.

Speaking of auto industry losses, they said that with the success of the Mustang it took the profits from it through from 1965-1969 to make up for the losses of the Edsel.

[Michael G.]

Re: Did GM Make a Profit on the 63 Corvette?

...The engineering staff were on salary and were paid regardless and even if they were Corvette exclusive (likely not) they would be switched to another project....

Not true. Specialized design and engineering projects were usually farmed out to to the vast array of job shops that used to exist in Southeast Michigan. Work at these shops was nowhere near a "constant", they might be on GM one day, Chrysler the next. Most of those shops worked 56 hour weeks, at very expensive hourly rates...a big hit on any budget.

[Ken A.]

Re: Did GM Make a Profit on the 63 Corvette?

Sorry guys, you just don't get it. Each project of any size had a budget director who's job was to ensure there was no profit and yet stay on general budget guidelines. So if a Chevrolet truck project was coming in too strong, then hours were shifted to another project like the POS Vega. Note,
each division was separate. All this maneuvering was done to reduce taxes. At over 50% market GM was far bigger than anyone in the tax department could imagine or control. So, bottom line, GM always made a profit, albeit a small one.

[Larry E.]

Re: Did GM Make a Profit on the 63 Corvette?

Just a brief history lesson. Only the senior members will remember this; but it is true. Around 1970 when GM
ruled the roost and had a 50% Market share in the U.S. car sales. Chevrolet had 50% of the sales for GM. That
meant that Chevrolet alone had a 25% market share in the U.S.(A huge number) The government wanted to
break up GM by having Chevrolet leave GM and be a stand alone company. GM would remain with everything else.
This was a very similar idea that the Government did to the "Baby Bell Telephone" Companies that happened later.
Boy how I wished it would have happened. Chevrolet would be a super strong company now and GM would have
disappeared long ago. Through the years GM has been very very coy on the Profit/Loss of each division. It would
be alarming to know on how much money was siphoned off of the Chevrolet Division to keep GM "fiasco's" and the
weaker divisions afloat. Larry

[Domenic T.]

Re: Did GM Make a Profit on the 63 Corvette?

Well,
I was a GM guy and even lost a bunch of money when I bet on them in the stock market. I worked at a Chevy dealer, no other brand. we got GMC trucks in for warrantee and I saw a Cadillac that looked like it was on a Chevelle frame and it had a Chevrolet engine in it with Chevrolet on the valve covers. Owner was PO'd, he said " I bought a Cadillac not a Chevy". In the late 50's my 59 Biscayne roof was the same as Olds, Buick, Pontiac.

I will say one thing for them, when I first saw a 63 coupe I was in love, couldn't believe how much change happened to the Vette. Still my favorite.

Dom