Stagnating Sales Leads GM to Warn of Layoffs at Michigan SUV Plant
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]
Consumer advocate tracking industry trends and regulations. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied, he pivoted to writing about cars. Since then, he has become an ardent supporter of the right-to-repair movement, been interviewed about the automotive sector by national broadcasts, participated in a few amateur rallying events, and driven more rental cars than anyone ever should. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and learned to drive by twelve. A contrarian, Matt claims to prefer understeer and motorcycles.
More by Matt Posky
Comments
Join the conversation
I wonder how Envision sales are doing...
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.