Impala Production Shifts To Detroit, Creates "Nervousness" In Oshawa

When I visited GM’s Detroit-Hamtramck Assembly plant back in October, I was greeted with a few surprises. One was a small fire that flared briefly on my sweater after a cinder from the Volt’s body-welding station struck me. The other was the sight of GM’s latest, most high-tech green car being assembled on a line that was filled with GM’s oldest-school dinosaur cars, the Cadillac DTS and Buick Lucerne. The scene was no doubt intended to inspire appreciation for the changing face of GM, but the scarcity of Volts amid the oceans of giant front-drive barges (production was just beginning) made it clear that it would be a while before Volt production would occupy much of the sprawling facility. With the DTS and Lucerne headed for retirement, the new 2013 Malibu will be taking up residence at Detroit-Hamtramck later this year, even as Volt production capacity is increased to hit next year’s 60k unit goal. And now GM is announcing that the next generation of Chevy Impala will be built at Detroit-Hamtramck as well, leaving folks in Oshawa saying “eh?” (or words to that effect).

I’m sure TTAC’s resident Oshawa Impala vet, mikey, will want to weigh in here, but in the meantime, here’s what CAW president Ken Lewenza is telling AN [sub] about GM’s move to bring Impala production back to the states:

It creates a sense of nervousness because you need the market to substantiate two facilities building the same vehicle. If the market isn’t there, one would have to take a look and question GM’s decision when they already had the investment in the Oshawa facility.

GM has not publicly stated when production of the next-gen Impala will begin in Detroit, or that Oshawa will definitely lose production of the car. But, as Lewenza points out, tooling up Det-Ham would allow GM to potentially pull the Impala out of Oshawa where it has been built with only brief interruptions since 1965. And, as it turns out, Lewenza could have reason to worry: the CAW has opposed the UAW’s two-tier wage structure, and its contract with GM is up in 2012 (Impala is said to be all-new for the 2014 model-year). Creating “overflow” capacity at Det-Ham could be as useful as a negotiating tool to force the CAW to accept two-tier as it is for actually keeping up with excess demand (GM must build 16% of its NA production in Canada under the current contract).

And luckily Det-Ham is a giant facility, with almost 3m square feet and an initial capacity of 250k units annually when it was built in 1985. Last year the plant built a little over 50k units, but with Volt production reportedly headed for 120k annual units (although definitely not next year… would someone please tell the feds?), GM will probably keep Malibu and Impala production on a strictly overflow basis. If that 250k capacity still applies (and it may not), there could only be 130k units of capacity for Impala and Malibu combined. If Fairfax remains the main Malibu production site, GM might be able to threaten the CAW with an Impala pullout, but that would limit further Volt ramp-ups, including Det-Ham production for a likely Volt MPV.

In short, mikey‘s Impala-building bretheren probably have nothing to fear… except the two-tier wages which they’ll probably be forced to accept at some point. Luckily the UAW may use the current negotiating session to narrow the gap between the tiers, creating a more equitable option for the CAW. That could be the key to keeping the Impala where it’s been since the days when GM enjoyed a 50%+ market share.