General Motors shutting plants
In a move reminiscent of 2005, General Motors is shutting down eight plants, killing their sedans, and reducing staff and salaries. Is there a recession looming, or did everyone stop buying sedans? Or is this a tariff issue with the price of steel?
President Donald Trump took General Motors CEO Mary Barra to task on Monday after her announcement to close four plants in the US because of the lack of demand for sedans.
The President spoke to reporters in Mississippi, said that he had talked to Barra about the closures, “I was very tough. I spoke with her when I heard they were closing and I said, you know, this country has done a lot for General Motors,” Trump said, referring to the federal bailout of the company after the 2008 financial crash. It was Bush and Obama that were responsible for creating the bailout of General Motors.
He later repeated: “You know, the United States saved General Motors, and for her to take that company out of Ohio is not good.” Ohio has eighteen electoral votes. Ohio was won by Donald Trump as was Michigan, but Michigan recently went blue in the mid-term election. In one stump speech last year, President Trump told Ohioans not to move, that the jobs will be coming back, so they shouldn’t move, they shouldn’t sell their house.
In a press release, General Motors outlined the cuts, kills, and reductions;
With changing customer preferences in the U.S. and in response to market-related volume declines in cars, future products will be allocated to fewer plants next year.
Three Assembly plants that will be unallocated in 2019 include plants in Canada and the United States:
Oshawa Assembly in Oshawa, Ontario, Canada.
Detroit-Hamtramck Assembly in Detroit.
Lordstown Assembly in Warren, Ohio.
The Hamtramck and Lordstown plants have been referred to as the historical backbone of GM manufacturing. Oshawa is a small town, sort of like Flint, Michigan. The closure will certainly affect the entire town as the plant has been open for over 100 years.
Two Propulsion plants that will be unallocated in 2019 include:
Baltimore Operations in White Marsh, Maryland.
Employees
Hourly – 253
Salaried – 57
Warren Transmission Operations in Warren, Michigan.
Employees
Hourly – 265
Salaried – 70
In addition to the previously announced closure of the assembly plant in Gunsan, Korea, GM will cease the operations of two additional plants outside North America by the end of 2019.
For now, the Corvette is still alive, but all of the sedans, including the Plug-in hybrid Chevy Volt, is gone;
Buick LaCrosse
Chevrolet Volt
Cadillac CT6
Chevrolet Impala
Chevrolet Cruze
Chevrolet Impala
Cadillac XTS
Previous generation Silverado/Sierra (K2 Trucks)
6-speed transmissions (for XTS, Impala, Malibu, Volt, Acadia) and the Global Front Wheel Electric (GFE) (for Volt)
Full-size pickup transmissions (T1 and K2)
Stocks are fluctuating more, corporate debt is at historic highs, home sales have fallen off this year as mortgage rates have risen along with home prices. The average price of a vehicle is $35,000 and global trade is down due in part to Trump’s tariffs, which are causing raw material prices to rise in the U.S. We may not see a recession in the next 6 months to a year, but 2020 does not look good, and it appears we are already in a slowdown.
Along with the factories and cars that are being closed down, 14,700 employees will be laid off, calling them “involuntary separations” eliminating about 15% of its salaried jobs. While America has a shortage of workers right now, it will mean these displaced employees are going to have to move to find a new job. This is not unheard of; when Henry Ford started his manufacturing plant many people moved from the South to Michigan to work. If there are jobs in the South, those Southern ancestors may be moving back to the South to work on European or Asian cars.
GM stock is up over the news that there will be an improvement of $6 Billion by 2020; $4.5B in cost savings and $1.5B in Capex savings.
Pre-tax charges of $3.0 to $3.8 billion
• Up to $1.8 billion of non-cash asset write-downs and
pension charges
• Up to $2.0 billion of employee-related and other cash
expenses
This also gives General Motors the ability to restructure for new automobiles and technology including electric and autonomous cars.
A list of all plants and the vehicles they produce are provided below. Which two other plants outside of North America (besides Korea) will be shut down?
General Motors North America Plants
Arlington
GMC Yukon
Cadillac Escalade
GMC Yukon XL
Cadillac Escalade ESV
Bowling Green
CAMI
Detroit/Hamtramck – shutting down
Employees
Hourly – 1348
Salaried – 194
Buick LaCrosse
Chevrolet Impala
Fairfax
Cadillac XT4
Flint
Chevrolet LD Silverado Crew Cabs
GMC HD Sierra Regular and Double Cabs
Chevrolet HD Silverado Regular Cabs
Fort Wayne
Chevrolet LD and HD Silverado Regular Cabs
GMC LD and HD Sierra Regular Cabs
Lansing Delta Township
Chevrolet Traverse
Lansing Grand River
Chevrolet Camaro Convertible
Chevrolet Camaro
Cadillac ATS Coupe
Cadillac CTS
Cadillac ATS
Lordstown – shutting down
Employees
Hourly – 1435
Salaried – 183
Chevrolet Cruze
Orion
Chevrolet Sonic
Chevrolet Bolt
Opel Bev
Oshawa #1
Employees
Hourly – 2600
Salaried – 300
Chevrolet Impala
Cadillac XTS
Oshawa #2
Chevrolet Silverado
GMC Sierra
Ramos Arizpe Vehicle Assembly
Chevrolet Cruze Hb
Chevrolet Cruze
Chevrolet Equinox
Holden Equinox
San Luis Potosi
Chevrolet Equinox
Chevrolet Trax
Silao Assembly Plant
Chevrolet Ld Silverado Crew Cabs
GMC Ld Sierra Crew Cabs
Spring Hill
Holden Acadia
Springfield (Navistar)
GMC Savana
Wentzville
Chevrolet Colorado
GMC Savana
GM INTERNATIONAL OPERATIONS
Rayong Truck
Holden Colorado
Chevrolet Colorado Crew Cab
Holden Colorado Crew Cab
Chevrolet EXT Cab
Holden Colorado EXT Cab
Chevrolet Colorado Regular Cab
Holden Colorado Regular Cab
Asaka City
Chevrolet Cobalt
Daewoo Lacetti
Chevrolet Matiz
Chevrolet Spark
Chevrolet Nexia
Bupyeong 1
Chevrolet Trax
Holden Trax
Opel/Vauxhall Mokka
Bupyeong 2
Chevrolet/Holden Captiva
Chevrolet Aveo
Holden Barina
Cairo
Isuzu N Series (Isuzu)
Chevrolet Rt50
Chevrolet Move
Chevrolet Optra
Chevrolet Lanos
Chevrolet Aveo
Changwon
Mktdivnd Damos
Mktdivnd Labo
Chevrolet Spark
Holden Barina Spark
Opel Karl
Chongqing I
Wuling Sunshine
Wuling Sunshine S
Wuling Sunshine V
Wuling Sunshine Pickup Single Cab
Wuling Sunshine Pickup Crew Cab
Wuling Hongguang
Wuling Hongguang S
Dongyue North
Chevrolet Sail
Chevrolet Lova
Buick Envision
Dongyue South
Chevrolet Trax
Gunsan
Chevrolet Cruze
Holden Astra
Hanoi
Chevrolet Captiva
Chevrolet Cruze
Chevrolet Spark
Chevrolet Aveo
Jinqiao Cadillac
Cadillac Xt5
Cadillac Ct6
Buick Gl8
Jinqiao North
Buick Velite 5
Chevrolet Malibu Xl
Cadillac Xts
Chevrolet Malibu
Jinqiao South
Cadillac Ats-L
Buick Lacrosse
Khorezm
Mktdivnd Damas
Mktdivnd Labo
Sgmw Baojun
Baojun 510
Baojun 530
Baojun 730 My16
Baojun 730 My17
Baojun E100
Liuzhou
Wuling Hongguang S
Baojun 310
Baojun 310W
Baojun 360
Baojun 510
Norsom I
Buick Gl8
Norsom II
Chevrolet Cruze Hb
Chevrolet Cruze
Buick Gl8
Norsom III
Buick Verano Gs
Buick Verano
Qingdao
Wuling Rongguang
Wuling Rongguang S
Wuling Rongguang L
Wuling Rongguang V
Wuling Rongguang Pickup Single Cab
Wuling Rongguang Pickup Crew Cab
Wuling Rongguang Xinka Pickup Single Cab
Wuling Rongguang Xinka Pickup Crew Cab
Wuling Hongguang S3
Talegon
Chevrolet Spark
Togliatti
Chevrolet Niva
Wuhan I
Buick Excelle Gt
Buick Excelle Gx
Chevrolet Cavalier
Wuhan II
Buick Excelle Gt
Buick Gl6
Chevrolet Equinox
Chevrolet Cavalier
GM SOUTH AMERICA
Bogotá (Colombia)
Chevrolet Sail HB
Chevrolet Sail NB
Chevrolet Spark (M300 HB and NB)
Chevrolet Bus – F Series (ISUZU)
Chevrolet Bus – LV
Chevrolet Bus – N Series
Gravatai (Brazil)
Chevrolet Onix
Chevrolet Onix Joy
Chevrolet Prisma
Chevrolet Prisma Joy
Rosario (Argentina)
Chevrolet Cruze
Chevrolet Cruze Sport6 (Hb)
Sao Caetano Du Sul (Brazil)
Chevrolet Onix Joy
Chevrolet Cobalt
Chevrolet Spin
Chevrolet Montana
Sao Jose Dos Campos (Brazil)
Chevrolet Trailblazer
Chevrolet S10
Quito (Ecuador)
Chevrolet Sail
Chevrolet Grand Vitara
Chevrolet Aveo Family
Chevrolet Dmax
Chevrolet N Series
Chevrolet F Series
Chevrolet C & E Series
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