By on April 1, 2019

Detroit Hamtramck Assembly Plant Cadillac CT6 - Image: GM

No one knows what the future of General Motors’ Detroit-Hamtramck assembly plant holds, or if it even has a future after Chevrolet Impala and Cadillac CT6 production dries up in January 2020. In an alternate future, however, the plant would have swapped out the sign out front, replacing the GM logo with a Fiat Chrysler one.

According to sources with insider knowledge, the two automakers met to discuss just such an ownership change.

Citing four sources, Automotive News reports that this conversation did occur following GM’s November 2018 restructuring announcement. Apparently seeing an opportunity to forgo unnecessary land wrangling and building expenses, FCA approached GM about the Detroit plant. The two companies reportedly couldn’t reach an agreement.

While the fate of Detroit-Hamtramck hinges on this summer’s UAW contract negotiations (the current agreement expires in September), its current lifespan surpasses that of the now “unallocated” Lordstown Assembly and the soon-to-be-shuttered Oshawa plant in Ontario. GM announced a brief reprieve to January of next year in February. Around the same time, FCA made its intentions known: a massive cash dump targeting numerous Michigan plants, with the aim of adding a slew of new or revamped SUVs to its Jeep lineup.

Part of FCA’s plan involves an expansion and repurposing of the Mack Avenue engine plant in Detroit’s east side — a move that’s dependent on the automaker gaining the necessary approvals from the city. The automaker hopes to acquire 200 acres of land adjacent to the current site, and the clock’s ticking on that particular deadline. (FCA has until April 27th to secure the land.)

Two sources claim FCA put its Mack Avenue plans on the back burner as it explored acquiring the not-distant Detroit-Hamtramck facility. While it isn’t know why a deal couldn’t be reached, one source claims the discussions were “legitimate.”

Naturally, the report raises the question of what, exactly, GM has in mind for its plant. The automaker says it intends to keep the CT6 in production, but hasn’t identified a new home for the range-topping sedan. As well, it was recently announced that Michigan’s Orion Assembly will become home to at least one new electric vehicle, so an imminent EV influx doesn’t seem likely. The plant’s fate should be made clear once contract talks wrap up.

[Image: General Motors]

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17 Comments on “GM Plant Was in Fiat Chrysler’s Crosshairs, Report Claims...”


  • avatar
    PrincipalDan

    Hmmmmmmmmmm interesting.

    Any bets on the death of Chrysler as a brand and the continued expansion of Jeep?

    In other CUV/SUV news, Buick has canceled sedans in Mexico but you can buy their CUVs.

    This current reality is getting less and less fun for me.

    • 0 avatar
      Hummer

      I don’t understand why everyone thinks Chrysler needs a full line of vehicles to exist, there are no stand alone Chrysler dealers in the US, it’s literally a different badge on a lot, a lot that contains a wide variety of vehicle segments to meet consumer demands. Just so happens that not every vehicle on that lot shares the same badge.

  • avatar
    SC5door

    Interesting that the land would come full circle as it was the home of the Dodge Main plant until Chrysler closed it in Jan of 1980.

    • 0 avatar
      JimZ

      my dad worked at Dodge Main for a brief time when they were building Aspens and Volares; this would have been right before the near-BK back then. The stories I’ve heard about how those pieces of s**t were built just re-inforces my belief that the absolute, utter worst car you can buy here new today is 1,000,000,000 times better than anything being shoveled out back then.

      • 0 avatar
        BobinPgh

        One argument against the bailout of Chrysler was: What has this company produced to benefit humanity, all they did was build unreliable gas guzzlers? We all the know the answer to that one, it’s all about saving boring, tedious jobs, not about the product.

    • 0 avatar
      sgeffe

      Yes. The irony is not lost!

      Native Detroiter before moving to Toledo in 1984, and I remember a lot of the goings-on, and the loss of that entire neighborhood! (After GM’s announcement last year, the Free Press had an article about that debacle, including a photo montage.)

  • avatar
    JohnTaurus

    OF COURSE GM wouldnt be reasonable when discussing selling the plant. This is just like when several companies tried to buy Saturn, Saab, Hummer, etc when GM announced they were being shut down. I remember reading a few times that “an agreement couldn’t be reached”. In other words, like this plant, GM would rather see the brands die than be reasonable with someone looking to acquire them.

    “We are shutting this brand down, it isnt worth us continuing it.”

    “I wanna buy it! How much?”

    “Oh, its incredibly valuable, I need a lot from it, it’s worth SO MUCH MONEY!”

    “Right…”

    I see individuals acting this way with cars. You will let your Gran Torino rot into the ground before you let someone get it for a reasonable price. Pathetic. Smh

    • 0 avatar
      JimZ

      I still think this whole “unallocation” thing is a negotiating ploy with the UAW contract coming up in September. If there’s truly no future for these plants then I don’t see why they’d want to just sit on them; they cost money just by existing. Nevermind the ill will from Hamtramck and Detroit bending over backwards for them to get the place built.

      • 0 avatar
        sgeffe

        The Poletown neighborhood ceased to exist, including that Catholic Church there! (Didn’t Ronnie Schreiber mention that there was a Jewish cemetery somewhere on the site?)

      • 0 avatar
        ttiguy

        Hey! We have a winner. Congrats JimZ.

        D-Ham isn’t closing. Lordstown, Oshawa and the other 2 may be done but mark my words, Dham will limp along for 2-3 years building only the CT6 while it also re-tools for a high-volume, next-gen vehicle to be built there. The deal will be hammered out this fall with favorable terms for GM. Mark it down.

        I’ve heard people whine that the Blazer should be built there or Lordstown also but that aint gonna happen.

        • 0 avatar
          Steve203

          “Dham will limp along for 2-3 years building only the CT6 while it also re-tools for a high-volume, next-gen vehicle to be built there. The deal will be hammered out this fall with favorable terms for GM. Mark it down.”

          GM is continuing to lose market share. The probabilities they come up with something so hot that they actually need D-Ham’s capacity in 2-3 years, without more cuts elsewhere, is pretty slim.

          My expectation is D-Ham will be in a three way fight with Fairfax and Grand River for survival.

          When the closures were announced last fall, an article published the run rates, as percent of capacity, for GM passenger car plants:
          D-Ham 37%
          Lordstown 30%
          Oshawa 33%
          Fairfax (Malibu and XT4) 48%
          Grand River (Camaro, ATS, CTS) 33%
          Orion (Sonic and Bolt) 34%
          Bowling Green (Vette) 27%

          The Vette’s profit margins probably keep Bowling Green safe. Orion has become GM’s EV plant, so it’s safe.

          The Impy is probably only being kept to give the workers at D-Ham something to do for the 3+ weeks per month when they are not building CT6s.

          Bottom line is any one of Fairfax, Grand River or D-Ham could build all the Malibus, XT4s, Camaros, CTSs and CT6s GM needs.

          I read an article published in a manufacturing engineering magazine when Grand River first opened in 2001. The article said the plant was built so cheap and flimsy, that it would be economic to tear down in only 15 years.

          Fairfax is a bit of a stretch for GM’s supply chain as most of the parts plants are clustered around the Great Lakes.

          Some beancounter in the RenCen may have decided that Fairfax’s remoteness and Grand River’s flimsiness actually made D-Ham a better option than the other two, so they extended D-Ham past contract negotiations, to squeeze more out of the workforce, before dropping the hammer on Grand River and Fairfax.

  • avatar
    Steve203

    FCA buying D-HAM was such a stunningly good idea, it even crossed my mind.

    As the article says, the city has a short time to gain title to 200 acres around the present Mack Ave/JNAP site, including closing off a public street. to provide the extra space FCA needs. Then, there is the time and expense of building a new paint shop, improvising body and final lines in the two existing engine plants, and moving Pentastar engine production to another engine plant.

    Buying D-Ham, eliminates all that. The land footprint and integrated auto plant shell are already in place. Just gut out the inside and install equipment as needed.

    By selling D-Ham, GM avoids the demolition and cleanup expense.

    Even the timeline was right. GM was going to shut down D-Ham in June. FCA wants to break ground at Mack Ave in June.

    In the back of my mind is the thought that the Wagoneer will cannibalize the Grand Cherokee. If I was in Manley’s shoes, I would get the Waggy into production before dropping a couple Billion to double GC capacity. The Waggy is supposed to be built at Warren, but Warren is still occupied building 1500 Classics, so the Waggy is delayed.

    The Steve plan was for FCA to buy D-Ham. Convert D-Ham to BoF construction and use it for additional new 1500 production, plus the Wagoneer. Then leave Warren as is, cranking out 1500 Classics. With two plants building new 1500s and Warren at full trot building Classics, they should be able to pull the 1500 Classic out of Saltillo, creating available capacity at Saltillo to build the “metric ton” Ram p/u that has been held up by lack of production capacity.

    But noooo. GM wants to play the locals at D-Ham, Fairfax and Grand River off against each-other, with only one of the three plants surviving. So they passed up a legitimate cash buyer for D-Ham, but will saddle themselves with another big bill for site demo and cleanup, because, if they close D-Ham and start looking for a buyer, after brushing off FCA, the scrappers in Detroit will tear the place apart until it’s so far gone there will be no alternative to tearing it down.

  • avatar
    seth1065

    Why would GM want to help FCA, they have not said what they are doing with the plant maybe they use it as a wedge with the contract comes up with the UAW? It does not cost them a ton to kill the plant vs their overall profits, why hand FCA a shell to build profitable trucks or SUV’s that compete against your cash cow?
    I am not saying it would not be good for FCA but what benefit would it buy GM? It is not like the UAW would say thanks we will drop this demand in our next contract w you bc you did FAC a solid. In theory, the workers would not be affected if GM sold them the plant vs if FCA built a new one in town, I do not know if the GM workers here would be hired at the FCA plant??? Do auto worker go from Ford to GM to FCA or do they tend to stick with one company?

  • avatar
    WildcatMatt

    This is looking more and more like zero-sum political football on GM’s part where a Pyrrhic short-term one-sided victory (not doing something that would benefit a competitor, using the situation as a negotiating wedge) is preferable to something where everybody gets something (FCA gets a plant, GM gets some cash, UAW workers get jobs).

    • 0 avatar
      Steve203

      “This is looking more and more like zero-sum political football on GM’s part where a Pyrrhic short-term one-sided victory”

      As Seth said, why would GM sell a plant to FCA so FCA can build vehicles that compete with GM? Preventing competition could be the common thread behind not selling Saturn to Roger Penske, not selling Saab to the Chinese and backing out of their attempt to sell Opel 10 years ago. GM would rather lose money, than make a rational choice.

      Thing is, FCA will find a way to build more vehicles. Compass production for the European market starts in Italy this year. That will clear some capacity at Toluca. Both Windsor and Brampton are scheduling extra downtime to clear excess inventory. If the Grand Cherokee is more profitable than the Caravan, I could see them dropping the Caravan so Windsor could be the swing plant for the Grand Cherokee.

      So, by refusing to sell D-Ham to FCA, all GM accomplished is to not receive several hundred million for selling it, and, instead, have a bill for several tens of millions for demolition and site cleanup.

      But that isn’t new. GM has been dithering, and losing market share, for 40 years. Barra’s entire working life has been in the GM culture that has run that company down, so she is predisposed to continue the policies that made GM what it is today.

  • avatar
    Jeff S

    GM might be counting on the taxpayers to bail them out again. Agree FCA is going to build those vehicles somewhere and it is better to get something for the plant than to have to pay to tear it down.

    • 0 avatar
      BobinPgh

      If that happens, then the best thing GM can do is demolish and clean up D-Ham and return the land back to Detroit to possibly recreate the Poletown neighborhood. I would think that with D-Ham having started in the 80s, clean up costs might not be as much. Maybe GM was more responsible with hazardous materials then than they would have been starting 100 years ago, as with Janesville.


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