American Axle Strike To Shutter GM Lordstown (Cobalt)
And so the United Auto Workers (UAW) strike at American Axle (AA) now enters its second month, without any imminent prospects of resolution (i.e. a GM payout). As Buffalo's Business First points out, "The upper hand clearly goes to (American Axle management) which has $350 million in cash on the balance sheet, does not need to supply GMT900 pickup truck axles for quite some time and has recently begun producing axles for the GMT900 SUV in its Mexican facility." Even so, the strike has shuttered 28 GM plants, and there's no way AA could ramp-up to supply all of the truck-making factories from South of the Border. And while GM may be happy to watch its oversupply of SUVs and trucks melt away, there's a limit to how long they can afford the resulting termination of their cash flow. And now it seems that the AA strike is spreading in an entirely unwanted direction: Chevrolet Cobalt production at Lordstown. (Say what you will about the car– and God knows you have– but it's The General's second best selling car at over 200k p.a.) The Tribune Chronicle reports that "United Auto Workers Local 1112 President Jim Graham said the 2,400-worker factory could stop building the Chevrolet Cobalt small cars anytime between Friday and April 4 when it runs out of a [AA-made] part to make brakes that are used by nearby supplier Automodular." There's a 53-day supply of Cobalts on the ground, but no question: that's gonna leave a mark.
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Buick 61, I agree. For those of us who value the cash more than a socially acceptable nameplate (I know anathema on an auto enthusiast site), American steel is an important low-cost alternative to pricey foreign vehicles. I worry about the ramifications of a shuttered American manufacturing sector.
FW, Thanks for that info. I suspected that was the case. I find it unfathomable that the government allows an organization of people to pull a stunt like this. It's like the cable company charging you 70% of your cable bill while cutting you off from cable because they decided your neighbor wasn't ordering the right cable package.
I don't say that the Cobalt is a bad car (there are very few truly bad cars out there today), only that there are better ones. The Cobalt is light-years ahead of any other small car GMNA has ever built, but they've still got work to do.