GM Closing Three North American Plants, Ending Production of Multiple Models; Trump Threatens Retribution
UPDATE 11/27/18: President Trump and his administration have threatened consequences for General Motors in response to the company’s announced plant closings. Tweets from the President and remarks from National Economic Advisor Larry Kudlow suggested that the government would look to "cut subsidies" to the company in regard to electric vehicles, although it’s not clear what this refers to. We will update as more information is available.
UPDATE 11/26/18: Chevrolet representative Kevin Kelly confirmed to C/D that Cruze and Volt production will end in March 2019 and Impala production will end in the fourth quarter of 2019. GM representative Jim Cain said that Buick LaCrosse production will also end in March, Cadillac XTS production will end in the fourth quarter of 2019, and Cadillac CT6 production will end in mid-2019, although he also added that this announcement will not affect the recently revealed CT6-V. GM will do a short production run of CT6-V models for the U.S. market before the Hamtramck plant shuts down, Cain told C/D.
Details on all models to be discontinued by General Motors.
In a major restructuring of its operations, General Motors has announced it is shutting down three plants in the United States and Canada that currently produce cars including the Chevrolet Cruze and Chevrolet Impala sedans and the Chevrolet Volt plug-in hybrid. The company says its future production plans will focus on building more SUVs and trucks while also prioritizing battery-electric vehicles.
The plants that are closing include facilities in Lordstown, Ohio, which builds the Cruze; Detroit-Hamtramck, Michigan, which builds the Volt, the Impala, and the Cadillac CT6 and Buick LaCrosse sedans; and Oshawa, Ontario, which builds the Impala and the Cadillac XTS along with serving as a final assembly location for the Chevrolet Silverado and GMC Sierra pickups. These plants currently employ a total of approximately 5600 workers. GM says these plants will be "unallocated" in 2019, meaning no future products will be assigned there.
While GM is not yet going the way of Ford, which canceled nearly all of its U.S. car nameplates in one fell swoop, it does seem that big changes are coming to the GM lineup. Going forward, the company says it aims to share more components across its product portfolio, estimating that 75 percent of its future global sales will come from just five distinct vehicle architectures. GM cites slowing car sales as a reason for this shift, and the numbers bear this out. Through September 2018, sales of several of these Chevrolet and Cadillac car models were down compared to the same period in 2017: the Cruze was down 27 percent, the Impala was down 13 percent, and the Volt and LaCrosse were each down 14 percent.
GM says that these production shifts will help the company increase cash flow to $6 billion by the end of 2020. "We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success," CEO Mary Barra said in a statement. This move comes on the heels of a major GM cost-cutting initiative that offered buyouts to 18,000 employees in a bid to slash costs. GM is now saying that it will cut salaried staff by 15 percent.
We will update this story as we learn more about GM's restructuring and future production plans.
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