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Here’s What GM Means By “Unallocated” Plants In Its Restructuring Announcement

On Monday, General Motors announced it would idle four U.S. manufacturing plants: Lordstown, Ohio, Detroit-Hamtramck, Michigan, Baltimore transmission, Maryland, and Warren transmission, Michigan.

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.

2012 Chevrolet Cruze production at Lordstown plant 06 fender install

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.

Oshawa-Assembly-Cadillac-XTS

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.

Former GM Authority staff writer.

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Comments

  1. C’mon GM lets see a little of that nice kickback you got from orange the taxman… Ford/FCA can join in on the fun too, cmon UAW you voted to put the orangoutang wrench into the system with this guy, how far is it to just stick it to these guys with their newly found stacks of unspendable ill gotten tax rebate money?

    Reply
  2. Sounds like GM is going down again! After canada and the USA bailed them out , they are still shutting down.They should have to at least pay us back or stop selling cars in Canada and US,next time we should let them go down.

    Reply
    1. These moves are exactly what’s needed to prevent future troubles. Other automakers will follow.

      Reply
  3. Greg is right.

    Let’s grt some facts in the way.

    Lordstown for example needs 80% capacity to be profitable. But they are only 31% capacity with the decline of sedan market.

    GM also has no immediate model to fill the plant. No the Blazer was planned for Mexico several years ago.

    Spring Hill was unallocated too after Saturn but today it is running wide open.

    The truth is these moves are to prevent GM from going broke by removing slow unprofitable product.

    While painfull to see it is a tough move that needs to be made.

    If everyone who said I was going to by an Impala had really bought one things might be different,

    Reply
    1. The problem with your thinking is no plant in mexico is closing.!yes products have to change but american and canadian plants can still build the new product. after all it was canada and the us that bailed out GM back in 2009 not mexico but they got all the jobs

      Reply
      1. Here is the reality.

        Lordstown is a much bigger plant than Mexico. The lower volume can be merged to make it profitable with all sales including Mexican and South American exports.

        Watch as Lordstown will be back with a higher volume model. GM likes the UAW there. That is how they got the Cruze in the first place when it was three shifts with no lunch.

        Oshawa is gone more to do with Unifor. They have not tried to work with GM and are the reason they were given lame duck models to build.

        This is business and things are not always going to go right. The key is to fix the problems before they become fatal. GM failed st that before and are not going to repeat that.

        The Blazer move was not possible. Also with only one model it would not have been enough to fill the large plants capacity.

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    2. A smart auto company would have done like Ford and FCA is doing- converting car production to SUVs, CUVs, and trucks. GM is simply throwing in the towel, and like the GM of Smith and Stempel, the are about three years behind the curve.

      Reply
      1. If you were smart you would know better than making this statement. It is telling of your lack of knowledge on the topic.

        Your other post reinforce you have no real clue.

        On the Contrary Ford and FCA tossed in the towel. GM had hoped they may have seen a pick up but the market continues to shift with even Toyota losing small car sales.They at least have higher volumes at smaller plants with no unions in some cases. Also they have global sales. But in time I expect them to make a similar move.

        Reply
        1. I am a hell of a lot smarter than you are. Only a dummy would think it is wise for a company to sit on their hands for three years to realize the market is shifting and when they come to the realization that it is, just pull the plug and cede market share.

          Reply
  4. I’d really rather see them move CT6 production to Lansing with the other Cadillacs, then give either DHA or Lordstown the next generation Encore, Envision, and Trax to produce.

    Reply
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