The Fallout: Asinine Suggestions and Legitimate Pain Greet GM’s Announcement

It didn’t take long for the usual suspects north of the border to respond to General Motors’ looming plant closures with ridiculous “solutions” — nationalizing GM Canada, for example, no doubt with the goal of repeating the successes of British Leyland in the late 70s and early 80s. Who could doubt the profit-generating prowess of the public sector?

Elsewhere, fiery rhetoric from autoworkers’ unions greeted news of GM’s plan to shutter five plants in the U.S. and Canada. But without new product allocations, and with demand for traditional sedans sinking fast, there’s little hope of seeing these facilities return to their golden days.

CEO Mary Barra defended the plan to stop production at the plants and discontinue a raft of models next year, claiming the move, coupled with other cost-saving initiatives, would protect GM from an eventual economic downturn. It would also free up development cash now, rather than threaten its existence down the line.

“This is what we’re doing to transform the company. The industry is changing very rapidly,” Barra said in a news conference attended by The Wall Street Journal. “We think it’s appropriate to get in front of it while the business and the economy are strong.”

She added, “We don’t see anything specific on the horizon. This is about making sure GM is lean and agile to get in front and lead in autonomous and electric vehicles.”

In total, 14,800 GM employees might end up leaving the company under the current streamlining efforts. Some 8,000 of them would be in North America — a loss of 15 percent of the automaker’s North American salaried workforce — with the company accomplishing its goal through layoffs, retirements, or buyouts. For the consumer, the potential loss of Oshawa Assembly, Detroit-Hamtramck, and Lordstown Assembly, plus a Michigan and Maryland transmission plant, would mean pretty much the end of the GM car as we know it.

Built at the three aforementioned plants are the Chevrolet Cruze, Impala, and Volt, the Cadillac CT6 and XTS, and Buick LaCrosse. Barra said that the loss of production would lead to the discontinuation of the models in North America. Meanwhile, ther Chevrolet Sonic, built at Michigan’s Orion Assembly, is living on borrowed time, as is the tiny Spark, which hails from GM Korea. That leaves the Chevrolet Camaro, Corvette, and Malibu, the upcoming Cadillac CT5, and the current Buick Regal to satisfy traditional car buyers.

2019 Buick Regal Avenir

True, GM workers wouldn’t find themselves in this situation if consumer tastes hadn’t migrated to light trucks. Through the end of September, year-to-date sales of the XTS (a livery favorite) rose 15.9 percent, but it was nowhere but down for other models slated for execution. U.S. sales of the CT6 fell 10.6 percent, year to date, while the Cruze dropped 26.5 percent, the Impala 13.4 percent, and the Volt 13.7 percent. Buick’s full-size LaCrosse, which has shed buyers for years, completed the first three quarters of the year with 14.2 percent fewer sales.

According to the Associated Press, LaCrosse, Volt, and U.S.-market Cruze production will wrap up March 1st, 2019, with CT6 and Impala production ending June 1st. The Warren plant, maker of six-speed transmissions, would go dark on August 1st, with Baltimore’s plant ceasing work on April 1st.

While there’s a chance the plants might be put to a different future use, the products built within seem destined for the grave. In the U.S., United Auto Workers representatives called the move “callous,” vowing to fight the decision via legal, contractual, and collective bargaining means. North of the border, Unifor president Jerry Dias said he’ll be “very aggressive and very aggressive soon” on GM, with the Detroit Three autoworkers’ union claiming it plans to meet with Prime Minister Justin Trudeau.

What good that will do remains to be seen. Ontario Premier Doug Ford, after speaking to the head of GM Sunday, said “the ship has already left the dock.” Oshawa Assembly, which has produced vehicles since before Chevrolet was even part of GM, will turn out the lights at the end of the year.

a version of this report first appeared on thetruthaboutcars.com

Comments