By on November 26, 2018

Detroit Hamtramck Assembly Plant Cadillac CT6 - Image: GM

But first, some Cyber Monday deals…!

Just kidding. Hopefully we’ve seen the last of that, God willing.

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.”

Lordstown

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.

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.

[Images: General Motors]

Get the latest TTAC e-Newsletter!

Recommended

101 Comments on “The Fallout: Asinine Suggestions and Legitimate Pain Greet GM’s Announcement...”


  • avatar

    Show some guts and strike.

  • avatar
    jmo2

    When Saudi Arabia and Iran start shooting at each other and gas goes to $10/gallon – what’s the plan when the pubic abandons SUVs & Crossovers? Just go bankrupt again like they did last time oil prices spiked?

    • 0 avatar
      Asdf

      If that happens, then GM will just import some of the utter crap it already makes in China (the country that specializes in making crap, no wonder GM thrives there). Come to think of it, importing Chinese crap is what GM plans to do regardless.

    • 0 avatar
      Peter Gazis

      Jmo2

      The Impala, Lacrosse, XTS & CT6 are all large sedans. Not known for fuel efficiency.

    • 0 avatar
      Pete Zaitcev

      I bought a 2019 cross-over a month ago that beats the mileage of my 1997 coupe.

    • 0 avatar
      bd2

      That argument doesn’t really fly anymore.

      The majority of buyers (when they move from a sedan to a CUV) go DOWN a size-segment (i.e. – from an Accord to a CR-V and not a Pilot) where the fuel economy (as well as pricing) is pretty similar.

      Also, many auto-makers are moving to a 48V mild hybrid as the standard battery system to further improve fuel economy.

    • 0 avatar
      Ion

      When’s the last time you looked at fuel economy of CUV’s? The other day I was thinking how it’s funny, Americans historically hate hatchbacks. Yet all the automakers had to do was stick lift kits on the hatchbacks and they now sell in droves. Somewhere the people behind me AMC eagle are kicking themselves.

    • 0 avatar
      JohnTaurus

      OMG what will they do?!?!? The profitable and strong-selling Equinox only gets 28 MPG combined, so what they need to do is continue to produce the Impala that loses money, sells poorly, and gets 22 mpg combined. DUH!

      And, we all know that Iran and Saudi Arabia are the worlds only producers of oil, certainly not the United States which is now one of the top producers.
      And, we all know the bankruptcies in ’09 (era) were solely the result of oil prices and NOT a worldwide financial crisis that had widespread effects on many businesses and industries, many of whom were completely unrelated GM or Chrysler.

      Oh, we know that in 2009, GM did NOT build the Cobalt, HHR, Aveo, and Malibu. That was the problem! They had NO CARS!! NO CARS!! NO CARS!! Never mind the fact that gas is more expensive now than it was then, yet light trucks continue to dominate. Never mind that crossovers provide more utility and room yet dont get much worse, if any worse, fuel mileage.

      Go back to your armchair and see if you can figure out how to successfully run a worldwide corporation better than they can. Be sure to find (make up) reasons (since the ones you gave are totally without merit) to continue to build products that sell poorly and cost more money to build than they can be sold for.

      • 0 avatar
        DeadWeight

        JohnTaurus93Tempo93KiaAmanti2003, tell us all your entire life story, from who you are dating, to what you are doing at any given minute, particularly on any Friday or Saturday night, to your full spectrum political, religious, economic, social and philosophical views, and much, much more of your personal viewpoints and opinions and experiences.

        We all await your sharing, often up to dozens of times/comments in a single article on TTAC, and many dozens per day, with extreme anticipation, because we want to know you and your life with specificity, because you and your viewpoints are that important to the TTAC sphere and global community.

        Tell us more and more and more…

  • avatar
    MBella

    With all the money both countries gave them during their bankruptcy, this is a pretty big kick in the face.

    • 0 avatar
      Ol Shel

      They take from the public, and give to the investors.

      • 0 avatar

        In the end we all take it up the ass.

      • 0 avatar
        civicjohn

        @Ol Shel, if memory serves me well, the shareholders were wiped out in their last bankruptcy.

      • 0 avatar
        bd2

        Well. activist investors have been ratting the sword again.

        And prior to the bankruptcy, activist investors forced GM to do 2 share-buy backs (there was also another post-bankruptcy) which ended up severely dwindling GM’s cash reserves.

        • 0 avatar
          civicjohn

          @bd2, if you don’t like the shareholders, don’t buy the stock. Sounds like the activist shareholders came out ok.

          Many, many shareholders and bond holders got wiped out in the last bankruptcy. Win a few, lose a few. Ask any widows and orphans still holding GE stock.

          • 0 avatar
            bd2

            Huh?

            If I were a shareholder (in GM), would be very happy for the “activism” and share buybacks (would be able to share the shares at a profit).

            But that doesn’t necessarily mean it’s good for GM or the country.

          • 0 avatar
            civicjohn

            @bd2, there was no reply button on your post, which means this response may be above your post, my bad.

            Sounds like you agree with the activist shareholders making money.

            I guess where we differ on is with respect to corporate governance and decisions that are good for the country. While I don’t think any company should make decisions that are just plain bad for the country, sometimes dramatic changes have to happen. If a new CEO comes in and needs to make changes to try and save the company, sometimes it will have to layoff staff. I don’t like people losing their jobs (see below), but I assume the board and the CEO made the best decision for the shareholders. If GM was supposed to maintain 100% employment because of the government bailout, perhaps they should have got it in writing.

            I don’t think this makes the current or the previous administration look very good.

    • 0 avatar
      ajla

      “With all the money both countries gave them during their bankruptcy, this is a pretty big kick in the face.”

      Especially giving the Blazer to Mexico earlier this year. That’s just *chef’s kiss* right there.

  • avatar
    Hummer

    Jeez guys, do us all a favor and kill the Malibu

  • avatar
    TheDutchGun

    Isn’t this just pure dollars and cents? They can build their products elsewhere for cheaper? Just don’t buy their products if that offends.

    It sucks that folks are losing jobs, but this type of thing happens in every industry doesn’t it?

    I think in Ontario we’ve simply priced ourselves out of being an attractive place for large-scale manufacturing.

  • avatar
    tomLU86

    The US and Canadian governments stepped in and kept GM alive.

    For Canada especially, GM closing Oshawa must sting.

    The US govt estimates that when all was said and done, it lost $10 billion (that is, the costs of bailout that were not recouped by taxpayer).

    That’s a lot of money. For 100,000 US jobs, it comes out to about $100,000 per job.

    So, if GM is going to whack X jobs to ‘get ahead’, shouldn’t the US and Canadian taxpayer get a piece of the action? For without Uncle Sam, and Oh Canada, there would be no GM.

    For every job cut, have GM pay $100k to their respective ‘bailers-out’

  • avatar
    28-Cars-Later

    I read good post over the weekend which surmises a big problem in Amerika: a shirt made abroad costs $3 but they sell it for $30 as if it was made in the US. This twisted greed extends to many markets and products and it is totally destroying society.

    youtu.be/wwmOkaKh3-s?t=414

    • 0 avatar
      bd2

      Even designer brands like Ralph Lauren.

      A RL Polo shirt has actually gone UP in price despite being made in China (or other low-cost countries).

      But these days, who buys an RL Polo shirt at regular price?

  • avatar
    tomLU86

    JMO2, thanks for stating (what should be) a very obvious concern (which most people miss).

    We are but a mis-step or two away from an oil price explosion–which will blow up the Detroit Three, including GM.

  • avatar
    cicero1

    Big picture: US and Canada should have zero taxes on manufactures. You want to keep jobs and be cost competitive, get rid of the taxes. This is not corporate welfare – private funds still have pay for everything, it removes the artificial cost of taxes. AND this would be cheaper than paying for unemployment benefits, higher crime rates, lost tax revenue from unemployed workers (income taxes, sales taxes, house taxes), costs to deal with increased drug use, and on and on.

    US should also go after GM hard to move all Mexico operations to US.

    Small picture – the unions and or local govs (MI OH and /or ON) should get with Maga Styr (or similar) to set up a plan where they can purchase and run a factory and make the electric pickups and other start up vehicles that will otherwise never get off the ground. See Elo Motors – how many millions burned with no product. See article on Tesla nearing failing because they had no clue on large scale car production. These startups will never go anywhere if they try to build from scratch.

    • 0 avatar
      bd2

      That wouldn’t change much.

      Many corporations have effective zero tax rates due to all the tax write-offs and exemptions.

      The biggest cost here is labor.

      Unless we go to a $5/hr or less wage, difficult to compete for manufacturing for low-cost products.

      Light manufacturing jobs have seen some gains (as the cost of doing business in China has gotten more expensive), but they pay little above minimum wage w/ no benefits (which isn’t enough to have a middle class existence in the US).

      Also, many big corporations (over the past 5-6 years) have seen great profits.

      Little of that goes to the workers w/ most going back to investors (share buy-backs) and top management.

    • 0 avatar
      sportyaccordy

      You either forgot or don’t know that many manufacturers already don’t pay taxes. Municipalities/states scrap them or even PAY manufacturers to come to town. And in the end, it often still doesn’t work. Look up what happened with Foxconn in Wisconsin, and how it cost Scott Walker his gubernatorial seat.

      All this libertarian lasseiz-faire stuff works great on internet comment forums, but in real life it’s a different story. If municipalities would stop bending over a table whenever big business comes to town maybe we could work something out that actually benefits everyone, rather than just big business.

      • 0 avatar
        forward_look

        Hopefully the Amazon deal will cost Cuomo his political career. The billions “invested” in Jeff Bezos’s money machine/helipad will be worth it; otherwise, Cuomo will be elected president and the whole country will be down the toilet.

  • avatar
    civicjohn

    My former neighbors used to work at Saturn, both husband and wife. Moved to TN from Detroit on UAW’s (whoops, meant the US Government) dime. Great people, the migration of Red Wings fans was the reason Nashville has a hockey team.

    When Saturn closed, they each got $140k and health care. The wife went back to college and is now an RN, the husband waited it out for them to convert the plant to making engines and was back within 18 months.

    Feel really sorry for the folks who lost their job today, but 2 things come to mind:

    1. The UAW is a master negotiator on this kind of stuff, the template was used last time (I believe that was when my GM bonds were wiped out).
    2. If you are not too old and willing to reinvent yourself, it can be done, and I was very happy to see their outcome.

    I guess that means I’m conflicted.

  • avatar
    DeadWeight

    GM (Guangzhou-Guadalajara Motors) ROLLING DUMPSTER FIRE (vehicles and executive competency) in real time.

    Facts and math and years of post-bailout total incompetence have now caught up with GM (Guangzhou-Guadalajara Motors), and there’s no place to run to, and no place to hide (if one thinks it’s bad now, just wait until their sales of pickups and SUVs slow), BUT THAT’S WHY MARY BARRA, DAN AMMANN, MARK REUSS, ETC MAKE THE BIG $$$ (the braniac that is Mary Barra pulled down a minimum of 28 million USD in 2017).

    JOB WELL DONE I SAY, JOLLY GOOD SHOW!!!

  • avatar
    Whatnext

    No company ever shrank their way to greatness. it’s odd that VW Group can pay out billions in diesel fines and yet still field a full slate of models across their brands. GM takes billions in taxpayer money, yet still can’t get it right.

    • 0 avatar

      This is because GM and Ford are run poorly. I am jealous that the Germans, Japanese, and now Koreans are so much better at producing cars and trucks. Americans have a real inferiority complex when it comes to car production and soccer. We are just not competitive in these two things.

      • 0 avatar
        JohnTaurus

        Yes. Because sales of the Accord, Civic Camry, Corolla, Elantra, Altima, Sentra, Sonata, Forte, Optima, Maxima, Versa, Fit, Yaris and most of the rest of their cars aren’t falling. Oh. Wait. Yes, yes they are, and just as rapidly.

        Best selling Honda? Nope, not the Accord or Civic. It’s the CR-V. Best selling Toyota? Not Camry or Corolla, it’s the Rav4. Best selling Nissan? Certainly not the Altima or Maxima, it’s the Rouge.

        But its only the STUPID AMERICAN companies that are depending more and more on light trucks! The Japanese are just run better. How much do you want to bet that the Toyota models they have announced recently that will be discontinued are cars and not light trucks? I bet I can win all the Monopoly money in your toy box, if your statements here are any indication of your grasp and understanding of the auto industry.

      • 0 avatar
        CKNSLS Sierra SLT

        akear-
        I think you need to look at the sale numbers of GM and Ford trucks compared to Toyota and Nissan.

        Your statement about trucks are nonsensical.

      • 0 avatar
        carguy67

        re: “Americans have a real inferiority complex when it comes to car production and soccer.”

        Maybe that’s because only adolescent girls and Hispanics give a sh!t about soccer?

  • avatar
    ajla

    Let’s remember the good times:

    youtube.com/watch?v=QF072W52fc0

  • avatar
    Gardiner Westbound

    The Detroit Three, which had a 90% market share in 1965, died of corporate arrogance, union intransigence, and abject disdain for customers. They took every last dime out of the cars for profit, pushed junk out the door, and made hapless owners unwilling victims. Extreme cost cutting produced cheap nasty jalopies with tinny doors, hard plastic interiors, flimsy switchgear, body metal so thin you could dent it by looking at it hard and atrocious build quality. An entire generation of consumers ran away.

    • 0 avatar

      Just when American cars got competitive they got the ax.

    • 0 avatar
      carguy

      +1 GM products today are a collection of lowest bidder Chinese parts. Maybe the lesson they took from history is that there is always another bailout around the corner.

    • 0 avatar
      carguy67

      re: “The Detroit Three, which had a 90% market share in 1965, died of corporate arrogance, union intransigence, and abject disdain for customers. They took every last dime out of the cars for profit, pushed junk out the door, and made hapless owners unwilling victims.”

      My 1965 Mustang 289 convertible takes issue with this statement.

  • avatar

    Bye, Bye American car
    Bye, Bye American pie

  • avatar
    Tele Vision

    I would’t own one of the cars listed in the above article, nor will I buy one of the cars that this round of plant closures is projected to spawn. I guess that I’m part of the problem but modern GM is dead to me. I’ll stick with old cars and trucks and good tools – and Rockauto.

    • 0 avatar
      highdesertcat

      I can be a little more charitable. I used to be a GM fan. Bought new an Olds Custom Cruiser, a Toronado and a Silverado. Loved them each in their own way. By no means were they trouble-free.

      For now, all we own is my 1989 Camry V6, that still fires up when I need it to, and goes when I need it to go. After almost 30 years!!!

      Why would I ever step down to a GM or Ford product again?

    • 0 avatar
      ward3138

      Right, Detroit streets will start to look like Havana.

  • avatar

    Question of the day.

    What would you rather do, drive a new GM truck or suck on a urinal cake. Hmmm, that is a hard one.

    • 0 avatar
      DeadWeight

      There’s a closer relationship between the two than one may 1st realize.

      GM (Guangzhou-Guadalajara Motors) has many parts (exterior, interior and motor/drivetrain) supplied by Chinese companies that also make urinal cakes, and many of these lowest bid parts that GM (Guangzhou-Guadalajara Motors) incorporates into its vehicles are, in fact, made of recycled urinal cakes.

      http://www.alibaba.com/countrysearch/CN/urinal-cake.html

      • 0 avatar

        Good points. So you picked the urinal cake. Remember, I am not talking about sucking on a used urinal cake so it is not that bad. To avoid driving the GM truck sucking on a freshly lemon scented urinal cake is not that bad. I would be concerned about some of the chemicals contained in a urinal cake. They may have toxic elements in them.

        Some history about urinal cakes.
        The truth is the inventor of the urinal cake is really hard to find. It sounds like there were a lot of different ideas and models from 1880 – 1920. The first patent belonged to George A. Sleight on October 3rd, 1922.

  • avatar
    jimmyy

    So, Mexican plants make Chevrolet and GMC full size pickup trucks. And, Mexican plants make the Equinox and Terrain. All good selling vehicles. Why not move these vehicles to US factories being shut? Trump, fix this mess. GM should move those lines back to US factories.

  • avatar
    dlfcohn

    Heard a UNIFOR (GM’s Canadian Union) rep on the radio. He said that their contract prevents GM from closing the Oshawa plant until the end of September 2020. If true that probably won’t be enough to keep the plant open, but it will give UNIFOR additional leverage in negotiating the terms under which GM is allowed to leave town.

  • avatar
    28-Cars-Later

    Fact: The industry is changing has to contend with some kind of fuel efficiency increase in only a few model years.

    Fact: The industry is ripe for consolidation which has already started with the Opel sale and Mitsubishi merger/acquisition as examples.

    Fact: GM invested up to $12 billion in Cadillac and an unknown amount in Volt technologies over the past ten years.

  • avatar
    jthorner

    Time to bring back the GM Death Watch?

    Ford isn’t looking too good either.

    Maybe go all in for a USA Death Watch?

  • avatar
    pdog_phatpat

    I’m sorry, but I cant help but lmfao at everyone. I’m not happy about cars going bye bye, but man oh man did a lot of you have an absolute baby rage meltdown when Ford announced it, yet heres ol bailout boyz GM getting rid of ALL their cars. Feet to the fire, first FCA, then Ford, now GM. All for tall hatchbacks. Only in America! Bring on the URINAL CAKES baby!

  • avatar
    TwoBelugas

    I noticed few talking heads anywhere are mentioning the impact of the law suits that CA, et al are bringing to keep CAFE2025 the goal post.

    It should be fun to watch how Toyota & Friends deal with the small and midsize sedan segments that will become increasingly unprofitable when they either incur increasingly suffocating CAFE penalty or dump more and more money into electrification to minimize the shortfall.

  • avatar

    Why does car and driver rank GM SUVs at the back of the pack in their comparison tests.

    Answer:They are garbage!

    • 0 avatar
      DEVILLE88

      Car and Driver and Motor Trend always put anything US made in the back of the pack. Thier only value as a car magazine is the pictures or if you are a Japanese or European car fan………….you will love them……..I think they are full of poop!

  • avatar
    Blaz

    But why? GM makes great sedans!

  • avatar

    It is 7:30 let’s get started again.

    GM is trash………

  • avatar

    Here is yet another example of a GM suv finishing last in a comparison test. It happens almost every time. The only competitive GM vehicles are a few Cadillac’s and the Corvette.

    Below (last again).
    https://www.caranddriver.com/reviews/subaru-ascent-chevy-traverse-mazda-cx9-suv-comparison

  • avatar
    DonInYYC

    Oh oh, I have an idea….let’s sell the plant to Hyundai. Worked well in Quebec in the seventies. What could possibly go wrong? The Pony was simply a generation ahead of its time.

  • avatar
    DavesNotHere

    There’s Chevy’s new ad campaign: Real People, Real Urinal Cakes™


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Fordson: Some makes just should never produce SUVs…this is one of them. Look at the Maserati car in the group...
  • FreedMike: Toyota. Why do you think they haven’t invested in EVs?
  • redapple: Who will buy Tesla? GGM?
  • forward_look: Once I bought a ’74 (?) Colt/Mitsubishi for $100 that had the strut towers rusted out. I welded...
  • thelaine: Tick tock

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States