By on May 10, 2017

 

Ren Cen. GM

Automakers are seeing diminished interest in product as market demand levels off after years of post-recession growth. While some analysts are heralding an industry-wide doomsday, others have cited this as an inevitable market ebb with no cause for alarm. Either way, domestic and foreign automakers have begun scaling back production efforts.

In the United States, Ford recently announced layoffs at its Ohio truck plant and General Motors may be following suit by eliminating 1,100 employees at the Delta Township Assembly Plant near Lansing, Michigan.

GM’s newest U.S. factory was already scheduled undergo retooling for the 2018 Chevrolet Traverse and Buick Enclave crossovers. However, when the plant reopens this June, there’s a good chance that third-shift employees won’t be returning.

According to The Detroit Bureau, General Motors issued an official warning to 1,100 workers about potential layoffs —confirming earlier claims that job cuts were forthcoming. While the exact number of employees impacted by the cut has yet to be finalized, a GM spokesperson suggested only about half would actually lose their jobs. Still, any job retention could be temporary if deliveries continue to slip. U.S. auto sales fell another 4.7 percent in April, continuing a decline in sales that began at the start of 2017.

The majority of those prospective cuts are expected to come from assembly lines that manufacture sedans, coupes, and convertibles. Traditional passenger cars only account for a third of the market now. Meanwhile, SUVs alone have gone from 28 percent of the market in 2006 to about 40 percent today.

“We don’t see it stopping,” said Mark LaNeve, the head of Ford Motor Co.’s sales, service and marketing division, adding that there will be significant shifts in production strategies, even if domestic car sales suddenly leveled off.

[Image: GM]

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25 Comments on “Stagnating Sales Leads GM to Warn of Layoffs at Michigan SUV Plant...”


  • avatar
    SCE to AUX

    SUV sales are booming, yet GM will be laying off people who make SUVs?

    Well, with GM’s high inventory, I’m not surprised.

    • 0 avatar
      Krivka

      “The majority of those prospective cuts are expected to come from assembly lines that manufacture sedans, coupes, and convertibles” But to the point in the article, people don’t have the disposable income they once had. Cars are becoming a” can do without” luxury. There is a bubble and it, along with the student loan bubble, and when it bursts, it is going to be painful to say the least.

  • avatar
    Jeff Weimer

    “While some analysts are heralding an industry-wide doomsday, others have cited this as an inevitable market ebb….”

    Why can’t it be both?

    • 0 avatar
      DenverMike

      It can certainly be “both”. But it could run much deeper. Like there’s no better time to keep that “old” 11, 12, 13+ year old car or truck. Or to a better time to buy one of that vintage.

      Typically the paint/clear may be toast, along with other cosmetics, but it’s got another 10/100,000 left in it with a little help from internet advice/forums/fanboys/parts locators.

      But since you have other options, while watching politicians and squabble endless on who will build your next new car, its increasingly complicated, over regulated safety/emissions hard/software, Americans may be currently sending them and automakers a clear message:

      Keep your boring, fugly, overpriced sh!t along with its built in obsolescence. I mean I’m positive the paint, upholstery, headlight lenses, O2 (and other) sensors, factory stereos/infotainment, etc, are designed to gota hell at 11, 12, 13, regardless of miles.

      But I’m also thinking there’s never been a better time for resto-mods! They’re all over the internets, mild to wild ’80s, ’90s cars/trucks found with low miles, made new again, with updated custom mods and “tuners” to make you drool. And built for a fraction of “new”.

      • 0 avatar
        highdesertcat

        Auto sales depend on a lot of factors, real or imagined, and are also affected by an individual’s VIX (Volatility index), or (in)security complex.

        Last year, a lot of people took the plunge and stuck themselves into debt because the economic outlook for America was very optimistic. Out with the old, in with the new guy.

        So last month, reality kicked in. The political infighting, obstruction and legislative stagnation is affecting we, the people.

        Many who expected to be working again by now, or who had expected to see more in their paychecks because of a tax reduction by now, are sorely disappointed.

        It’s beginning to look a lot like….. the “swamp” is gaining the upper hand in the battle for our daily bread.

        For many, it’s back to retrenchment. No new car again this year. Just hold on to what we got.

      • 0 avatar
        sportyaccordy

        An 11-13 year old car probably has 2-3 years left before it’s broken beyond worth fixing. Eff that.

        Money is cheap, and new car sales are in the tubes. Used car prices are still ridiculously inflated IMO. There’s never been a better time to buy new.

        And you can still opt out of all the crazy infotainment stuff if you just choose wisely. Many mainstreamers have what’s equivalent to an aftermarket radio… hardly the kind of stuff that will torpedo a car’s electrics down the line. I mean there are cars 10, 12, 15 years old with infotainment from that time that are still going, and replacements aren’t eye-wateringly expensive. Buying a 11+ year old car to really depend on if you have the means to do otherwise makes no sense.

        • 0 avatar
          DenverMike

          If your 2004 Accord is begging for the crusher, maybe you’re doing something RIGHT! No doubt someone got their money’s worth.

          Yeah some people can’t deal with anything but “new”, but the good news (for me!) is not everyone gets a new car and immediately drives it into the ground. There’s a glut of clean, low mileage used cars (and pickups!), with a good 10 years left in them.

          Sure most might need windshield wipers, a tail light bulb, and a cleaning or the mass airflow sensor, but the rest is all profit, if you can live without the new car smell.

          So if you’re that rough on cars, you’re limited to “new”, and perpetual payments. But I’m really enjoying what the used (garage kept, fully loaded luxury!) pickup market has to offer, for a small fraction of new (strippers!).

          • 0 avatar
            highdesertcat

            Lots of guys in MY area, where rust is non-existent, that like to keep old, old, old cars running.

            So my best friend has three cars these days, his wife’s 2012 Grand Cherokee, a 2015 Avalon for the road, and a 1993 Chevy S-10 way past its appointment with the crusher.

            His wife made him give up the 1989 Camry V6 I use as MY DD now.

            Even old cars that are way past their expiration date are cheaper to own than a new car, as long as they still run good.

          • 0 avatar
            sportyaccordy

            All I’m saying is there’s a wide berth between brand new and 13 years old. I’d say the middle of that is probably the sweet spot, particularly if you find a low mileage example. If you keep a car to that age that’s probably fine too as you know its history. But buying a car with its age in the double digits is just a terrible idea. Complete roll of the dice without extensive insight into its history.

          • 0 avatar
            DenverMike

            Nobody should try it, only HDC or I should do such crazy stunts!!!

            It’s a used car man, not a rocket ship. Before you buy, take it to someone that knows cars. There’s plenty of those if you know where to look.

            Yes it’s a roll of the dice no matter what, but making sure the expensive stuff have a high probability of lasting many years, minimizes your potential losses.

            And obviously stick to the popular, mainstream cars/trucks. Like maybe do some research too? Ask around what’s a good used car with plenty “miles”. But stick to stuff with low miles.

            If you have a propensity to make impulsive buys on a whim, yeah you should stick to new stuff.

            Finding, buying, owning and upgrading older cars/trucks is a blast if you ask me. If you think you’d find it stressful and expensive, again stick to the new stuff.

          • 0 avatar
            highdesertcat

            DenverMike, you write that in jest, but decades ago, when I was a young two-striper in the Air Force and didn’t have a lot of money, I had no choice but to buy whatever I could afford.

            And some of it was pretty damn old!

            But I was young, optimistic, full of p!ss and vinegar, and became an invincible auto mechanic to keep it all running.

            Some old codger (at the time ~1966) told me, “if humans made it, you can fix it!”

            That was then. This is now. Today I would be lost without a Sun Analyzer.

  • avatar
    zip89123

    Too many horror stories on Traverse forums, plus GM does zero to advertise or promote the Traverse as they’re too busy pushing their REAL stupid people commercials.

  • avatar

    the trouble isn’t the economy, the competition, or the product. the problem at GM remains the incompetent marketing staff that has lost market share year after year. at General Motors, the results don’t change, just the excuses.

  • avatar
    deanst

    The problem is that all the capacity in the industry that was destroyed following the financial crisis has been replaced – we are at the same capacity as before. Therefore firms will be desperate again when volumes fall, and they have to cover their huge fixed costs. Nothing new here – just the normal business cycle.

  • avatar
    shaker

    I wonder how Envision sales are doing…

    • 0 avatar
      highdesertcat

      Advertised for $6500 off MSRP on Dishnetwork for MY area.

      But maybe that’s for the Enclave since both are shown parked side-by-side.

      • 0 avatar
        NormSV650

        The discounts for the lower trims of the Buick Envision are up to $10,000 off msrp in the Midwest at certain Dealerships or about $26,000 for a well equipped, near-luxury ride.

    • 0 avatar

      Stop the Invasion, Boycott Envision.

      the Chinese add 35% when we ship an Enclave

      they ship here without any tariff.

      • 0 avatar
        highdesertcat

        Hence, Trump….

        I learned after the fact that Trump’s shpiel about import/export taxation was a major contributor to union-workers switching their vote to elect Trump. Who knew?

        Seems all they wanted was a level playing field that they had been denied for the previous eight years.

        Prior to that, the trade deficit was not nearly as great.

        • 0 avatar
          Lou_BC

          By what definition do you use to define “level playing field?

          Conservative and Liberal politicians as far back as Ronald Reagan were all business Neo-liberals. In other words, *let the markets decide*. that *IS* the 0.1%/big business definition of a “level playing field”.

          Sockpuppetpotus has been flip flopping around like a fish on the floor of a boat over free trade, NAFTA, and China. It all depends on the last hand up his azz. The war has been between Bannon and Kushner as to who gets to be the puppet master.
          My money is on Kushner and the Goldman Sachs alumni he has around him.

          He will sh!t on Canada to make it look like he is doing something but China will get a free ride since he needs them to cooperate on North Korea and they approved all sorts of trademarks for him.

          • 0 avatar
            highdesertcat

            “By what definition do you use to define “level playing field? ”

            I don’t. I wasn’t the one affected by the import/export taxation schedules.

            “My money is on Kushner and the Goldman Sachs alumni he has around him.”

            You would be wise to do so since he is held in the highest regard by President Trump.

            And for those who are dependent on their investments for income, the Stock Market has been blessed by the Trump Effect.

            What an impressive start to Trump’s presidency! Can’t remember anything like it during my lifetime, not even Ronald Reagan’s presidency which took longer to gain momentum.

          • 0 avatar
            Lou_BC

            highdesertcat – I don’t see stock markets as a reliable indicator. investors tend to have a herd mentality. All in or all out. They also focus on return on investment. If their appears to be a positive trend, they go for it.

            “But when most firms are focused on making money out of money, through dividends, share buybacks and M&A activity, there aren’t enough firms growing the real economy to invest in. So the financial markets become a kind of gambling casino, with money chasing money in zero-sum games. The games continue until it becomes apparent that there is no basis in the real economy for the supposed financial gains that are being claimed. Then the dance abruptly ends, as in 2008, in a massive financial crash.”

            “In effect we are back in the world that Harvard Business Review has called “stock price manipulation” and Reuters calls “corporate self-cannibalization”.”

            “The Economist’s illuminating label is “corporate cocaine.” It explains why Wall Street is euphoric: share buybacks create a short-term financial high, followed by unhealthy economic crash.”

            Those quotes are from Forbes which is a noted conservative journal.

          • 0 avatar
            highdesertcat

            Lou_BC, I’m totally divested. Did that by mid-2008, right at the height of the market.

            I was lucky. I made a ton of money.

            But today’s stock market has had a positive effect on individual’s investment portfolios.

            They may crash tomorrow, but today Life is Good!

  • avatar
    Jeff S

    How about the fact that there has been a sales boom in new vehicle sales for the past 7 years. Isn’t it reasonable to assume after 7 years of a sales boom that the sales would go through a slump? Much of the boom in sales can be attributed to those delaying purchases of new vehicles during the 2008 Melt Down. Many of those who delayed purchases have already bought new vehicles. Also longer term loans, low or no interest loans by manufacturers, and more favorable leasing deals have kept sales booming.

    Also people keep their vehicles much longer than they did years ago. Vehicles are expensive for many who have not been fortunate enough to have jobs that have not kept up with the cost of living. Also vehicles last longer. There are still many underemployed workers, workers whose jobs have either been phased out due to automation or cheaper labor overseas, and those who work in industries that are either dying or becoming obsolete. Many of the jobs that are lost will never come back due to just more automation. There is a technology revolution that has made many types of work obsolete, but at the same time there are new positions requiring much higher skills that require education and training. Cleaner and less expensive natural gas is displacing coal and even in the coal industry many jobs have been automated. Even industries that have come back to the US from cheaper foreign labor markets are using more robots requiring less labor. Robots don’t get sick, take vacations, or go on strike and you can depreciate them over their useful lives.

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