However, the language was carefully worded, per United Auto Worker union agreements. GM isn’t able to simply shut down the plants, thus the facilities will go idle and be “unallocated” for 2019.
Unallocated means the plants won’t have any new vehicles scheduled for production, and they’ll sit on standby as GM culls the Chevrolet Cruze, Volt, Impala, Buick LaCrosse and Cadillac CT6 from its U.S. lineup of cars.
And next year, GM will need to negotiate the four plants’ official closures with the UAW. The current contract expires in September 2019 and it’s a for-sure circumstance that the UAW will use the nearly 15,000 laid off production workers as leverage.
In Canada, it’s easier to close the Oshawa plant. GM only need to give a one-year notice to shutter a facility in Canada, per the Unifor union’s agreement. The Oshawa plant is slated to close next year. Unifor members have already walked out on the job to show their displeasure with GM’s decision.
What does the negotiation mean for the plants’ futures? There’s a slim chance they could stay open if the UAW and GM agree on some sort of new structure. However, that appears highly unlikely. The two car production plans are tooled for sedans and would require millions of dollars worth of investment to produce an SUV, crossover or truck. But, anything is possible, especially if the UAW votes to strike.
GM has also accounted for a large majority of underused auto production capacity in the U.S. Analysts have said for years the underused capacity has cost GM millions and consolidating its production facilities will help free up $6 billion in savings by 2020, the automaker said. Nothing in GM’s announcement suggested it’s open to keeping the lights on in Michigan and Ohio, but the automaker will need to prepare for a grueling round of negotiations with the UAW first.