According to Paul Ingrassia, editor at the Revs Institute for Automotive Research, there’s a saying in public relations: If you have to explain, you’ve already lost. That’s how he presents GM’s spat of bad PR in the wake of its announcement to idle three U.S. plants leading up to negotiations with the United Automobile Workers union in September.
However, he also said GM’s decision to restructure its business to focus on emerging technologies such as electric and autonomous vehicles is the right move. It just looks terrible as Ford, BMW, and other automakers invest in U.S. manufacturing.
Ingrassia several times brought up GM’s bankruptcy nearly a decade ago to iterate his point that GM cannot fall into the same trappings that led to its financial demise during the Great Recession. After the recession, there was a demand for small, fuel-efficient cars like the Chevrolet Cruze. Demand for sedans and small cars has fallen since then. Ingrassia said it makes little sense to continue to build a product people don’t want to buy—and he’s not wrong. No business can survive building a product that doesn’t sell.
Ingrassia suggested GM should have entered a public-private partnership transitioning Lordstown factory employees from manufacturing jobs to fixing the infrastructure, a major talking point by both parties leading up to the 2016 campaign. However, that sort of coordination is unlikely.
U.S. President Donal Trump has been vocal about GM’s decisions to idle production at the Lordstown factory. However, Ingrassia said Trump isn’t looking at the economics of the situation, adding that it’s hard to forecast consumers trends, such as rising demand for crossovers, SUVs, and trucks at the expense of small cars. That said, Trump’s sentiment echoes the opposite end of the aisle, seeing similar rhetoric from union leaders and Democrat politicians. Everybody unanimously agrees that GM should continue providing jobs at the plant, despite economic realities.
There are also concerns from GM and other automakers that the boom in vehicle sales over the last decade is slowing. The boom lasted much longer than expected, according to Ingrassia, and GM is hedging its bets for the future.