GM Plant Was in Fiat Chrysler's Crosshairs, Report Claims

by Steph Willems

Published: April 1st, 2019

gm plant was in fiat chrysler s crosshairs report claims

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]

#Detroit-Hamtramck #Fca #FiatChryslerAutomobiles #GeneralMotors #GM #Plants #Production

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4 of 17 comments

WildcatMatt on Apr 01, 2019

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).

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- Steve203 on Apr 01, 2019
  
  "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.
  
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Jeff S on Apr 01, 2019

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.

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- BobinPgh on Apr 02, 2019
  
  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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