General Motors CEO Mary Barra will meet with U.S. lawmakers this week after the automaker announced a wide restructuring plan that could affect up to 15,000 production workers.
CNBC reported the meeting will take place this week and CEO Mary Barra will meet with lawmakers from Michigan and Ohio—two states where GM plans to idle car production plants. The automaker will take the Detroit-Hamtramck plant in Michigan, and Lordstown plant in Ohio offline in mid-2019. GM also plans to idle a transmission plant in Michigan, and a fourth plant in Maryland that also handles transmission operations.
Her visit will also include meetings with top leaders in Congress, according to congressional aides. Barra has reportedly made numerous phone calls to lawmakers in an attempt to explain why the automaker plans to idle the selected plants.
President Trump responded to the news that GM will close the plants and threatened to kill electric-car subsidies for the automaker. It’s unclear if the president has total power to make such a move, but GM will soon lose its federal electric-car tax credit. The automaker expects to reach the cap on the up-to-$7,500 credit by the end of this year or in early 2019.
The White House also said it seeks to completely end subsidies for electric cars and renewable energy, perhaps as early as 2020.
To be clear, GM cannot simply close the plants in Michigan, Ohio, and Maryland. Instead, it will need to negotiate their closure with the United Auto Workers union. The union has already vowed to vehemently fight the closures and use every tool necessary to ensure 15,000 workers aren’t without a job. GM previously released a statement that said the automaker is committed to U.S. manufacturing and many workers will have the opportunity to transfer to other plants. Solid figures weren’t discussed, however.
Comments
She and the management team needs to go. Their plan is to make cars and CUVs in foreign countries then import them. They only want to build trucks and SUVs in North America. Nope thats not good enough, GM.
I hope they grill her over why she put Blazer production in Mexico and kept Cruz in Lordstown. I personally think that was deliberate. She wanted this day to come. She wanted to get rid of Lordstown and its employees.
According to Autoblog’s listing, the Cruz is GMs fourth best-selling product this year so it would make sense to keep it in production in Mexico where it is currently built for other markets but have all products destined for the US come from there. Then put the Blazer in Lordstown. I wouldn’t think the UAW wouldn’t balk at that so long as Lordstown stays open. I also think there is also a general acknowledgement that low-margin vehicles like the Cruz are more viable if they can be sourced in a low-wage country like Mexico.
That to me, seems like a win-win. GM keeps Cruz as a gateway product for the company with the thought being if they can sell a young person a Cruz instead of Honda snagging them with a Civic, then eventually they’ll also be able to sell them an Equinox and Traverse instead of Honda selling them a CR-V and Pilot. Although selling young people a Cruz now may not make the company lots of money, it pays dividends down the road. The more profitable Blazer keeps Lordstown open and instead of the PR nightmare GM finds themselves in yet again, they could be announcing bringing back (the second and third shifts) jobs in Ohio.
I was willing to give Barra a chance but I think she’s shaping up to be another terrible GM leader that seems to revel in shrinking the company and lacks any long-range vision. In addition to decimating Cadillac and its recovery plan, closing four US plants, one Canadian plant, selling off operations at GM Europe (Opel and Vauxhall) that had been around nearly 100 years and turning GM Australia into merely a marketing company, she eliminated six US models two of which represented the future. She eliminated the image-enhancing electric-hybrid Volt and the company’s only self-driving car while saying she was making these changes to “focus on electrification and autonomous cars”. As they say, you literally can’t make this stuff up.
Sounds like a woman who idolized Roger B. Smith and Bob Stempel to me. She plans to grow GM by shrinking it. So, yeah, I hope she gets grilled and I hope the folks on Capital Hill aren’t as lost and clueless as they were grilling Mark Zuckerberg.
Bob Stemple was a pretty sharp guy who got caught up in a bad economy and inheriting the mess Roger Smith left. A true engineer, he and his team were responsible for the fantastic 1966 Toronado.
Cruze as a gateway product – exactly. Maybe the customer simply likes the sales person, or the damn coffee in the maintenance department waiting area, small things like that matter, but now many potential future SUV / truck buyers might be lost because they got started on something else. All for the profit of a disingenuous company.
Ok this uninformed piss and moan has gone on long enough.
Let’s add some accurate info to this misguided protest.
Yes the are selling about 109,000 Cruze. But the problem is the sales are continuing to decline and the Lordstown plant needs to be at 80% capacity to be profitable. Note they are at 31% capt and dropping.
Two the Blazer did not come because the Lordstown plant line could not accommodate the Blazer when the decision was made. The line can not handle it. Also the paint shop would need to be completely replaced to accommodate a larger product.
Now according GM Authority the Cruze will also die in Mexico too.
So the only viable plan is to kill the car or build it where labor is cheaper but even then how much more will the market for small cars decline.
Even now Honda and Toyota are seeing declines at their non union plants on global cars and they are questioning future investment in small sedans.
If you really paid attention to the market you would know none of these models going away we’re a surprise.
The Cruze when it went from 3 shifts to one with plenty of days supply on lots was a no brainer.
The Lacrosse and Impala selling so slow that they are still offing last years cars at major discounts was a bad sign but when they told the UNIFOR that they were killing the cars after 2019 and had no plans last year they should have woke up and been more cooperative than combative. Not a good way to win a bid on a new model or even get a chance to bid when GM has other plants that they could invest in like refitting Lordstown since the UAW there is much better to work with.
The CT6 is being replaced with a slightly smaller CT5 and a slightly larger real Flagship.
The Volt is going away as no one wants it. The platform will come back as a CUV soon that should double sales if not more.
GM used to stick with non profit and low profit plants in the past because it had contracts that forced them to keep them open as they lost money but lost less to keep them open. Today those contracts are gone and they can be proactive to remove dying and non profitable models and replace them with more profit driven product.
GM rode the bus to bankruptcy building millions of cars with little to no profit. That was pure insanity. The time has come to clear the dead wood and plant new products that will make money.
Yes it is sad when anyone loses a job. Assembly lines have been up and down for decades. You want security work in a stamping plant. In fact many of the folks at Lordstown have enough seniority to move to near by supplier plants for GM to remain working as the Ohio. PA areas has a large number of facilities.
Sure Mary could have kept the Cruze at Lordstown. She could invest $400,000,000 in a new model that was the best in segment and then still be faced with a declining segment where she would not even make back the investment they put into a new model.
Today it is not about just being profitable. Today it is about the max return on investment as development cost are through the roof and there is a limit to what people will pay. Labor cost are high, material cost are high and energy cost are very high.
Besides GM has been triming cost for a while now. Just wait for the hammer to drop at Ford as they are in real trouble. GM is not happy with stagnate stock prices at $38. Imagine what they are thinking at Ford with $8 a share prices as the profits from F 150 are in decline with no increase in sales and the higher material cost of Aluminum. Note the Ranger is built mixed material like the GM trucks. Ford even now is considering a 4 door Mustang to save it as it’s sales are declining. Yes the Camaro and Mustang both are on the block if they can not grow sales.
FCA is not much better. $15 per share reflect that even with increases in sales the large rebates and low trans action rates are not making them any money. They also need a dance partner to survive. Even Ford may need a dance partner soon.
So piss and moan all you like but you never present complete facts, ideas and number to the argument.
The auto industry is in for major changes and GM is only the first domino. More will fall soon globally.. We will see a few names even vanish.
Adding an SS. hatch and Diesel will not fix what is going on.
GM is making record profits. A few hundred million to convert a Lordstown to make SUBs is not a lot for GM. FCA converted their US plants and their sales are skyrocketing. Remember GMs stock price is being propped up by share buybacks and job cuts. Speaking of Toyota, they are actually adding more Corolla production in the US. Regarding a 4-door Mustang, Ford is responding to what the market wants not just abandoning segments and handing over market share. FCA will be just fine on its own thank you.
Stock price isn’t stagnant. It’s down 4.5% today.
Stuck in the 30’s, for the most part, for 8 years. GM’s trading range is more like a bond fund than a dynamic stock.
Scott3,
You said: “The Blazer did not come because the Lordstown plant line could not accommodate the Blazer when the decision was made. The line can not handle it. Also the paint shop would need to be completely replaced to accommodate a larger product.
So according to Wikipedia, GM’s Lordstown Assembly plant opened in 1966 and initially produced full-size, body-on-frame V-8 Chevrolets; specifically the Biscayne, Bel-Air, Impala, and Caprice. While continuing to produce the big Chevrolets, the plant added the Pontiac Firebird production in the late 1960s.
In the 1970s, the plant was re-tooled to produce both the full-size body-on-frame V-8 Chevrolet and GMC vans and the new unitized body Chevrolet Vega. The Vega was eventually replaced by the Monza which was also built at Lordstown along with its sister cars, the Pontiac Sunbird, Oldsmobile Starfire, and Buick Skyhawk throughout the second half of the 1970s.
In the early 1980s, those RWD small cars were replaced by FWD small cars; GM’s then new J-Body Chevrolet Cavalier and Pontiac J2000 (later the 2000, and later still the Sunbird). For 23 years, the plant built big vans and little cars including for about half that time, big RWD body-on-frame vans and little unitized body FWD cars. That sounds like a pretty flexible plant.
More recently, Lordstown has built the Chevrolet Cobalt and the Chevrolet Cruz, which is currently GM’s fourth best selling vehicle for 2018 according to AutoBlog. Although Cruz has been GM’s best selling car, the plant has been reliant on the fortunes of one product which competes in a currently shrinking market for small cars. That would seem to make Lordstown vulnerable. One would think GM would’ve considered that.
I don’t profess to be an expert and certainly I am not privy to any inside information but I’ve been watching GM for quite a while, albeit from afar, and it seems reasonable to me that if Lordstown could build big vans at one time, that it’s hard to believe that the “plant line could not accommodate the Blazer” and “the paint shop would need to be completely replaced to accommodate a larger product”. The latter of those statements seems more plausible than the former as I’m sure the plant shop has changed a lot over times as paint technologies have progressed. The former though, that the plant simply cannot accommodate a FWD, unitized body SUV either in addition to Cruz or to replace Cruz, seems far-fetched. Again, if Lordstown was big enough to build large panel vans, it should be big enough to build a FWD cute-ute.
Lets assume though that the paint shop would’ve been inadequate. GM routinely takes plants down for model change and makes upgrades. GM supposedly is spending $439 million on upgrades and a new paint shop in Bowling Green. It does happen. Plants do get upgraded. I’m pretty sure the Mexican plant needed some kind of modification before the Blazer production could begin.
I think GM could have built the Blazer in Lordstown if they wanted to and they should have wanted to. It was the US taxpayer that lost $11.2 billion to keep GM in business and Mary Barra out of a jobs retraining program. Our former US president agreed to the bailout under the pretense that GM provided good jobs to Americans. So GM got the money and they ought to feel some sense of obligation to the American taxpayer to uphold their end of the bargain and continue to provide good jobs here rather than in Mexico. I think given the history of Lordstown, it’s perfectly capable of building whatever product today’s market demands.
I am glad you do not proclaim to be an expert.
I was there in 1966 and even have the yard stick they gave away. I am very familiar with the plant and know well it’s history. You even left out the early F body cars built there.
Yes the building itself can accommodate the Blazer physically. But!
Here is were the internet CEO fail. This is how GM has to look at it. The plant in Mexico already is set up for a larger vehicle and already has a large paint shop since it has handled everything from a Hummer, trailblazers and full size trucks. No major cost involved to put 5he Blazer there and savings of hundresds of millions of dollars just in line work. Also Hundreds of millions to not have to install a new paint shop. To build say 250, 000 units some of which will be exported to South America and many staying in Mexico. Some I think are also going to Korea.
The start up cost at Mexico I would wager is 1/3 that to turn Lordstown around.
As for the lost money that is due to the Obama administration bailing on their shares when they were even lower than they are now. That is not on GM and if you see these moves are to push up stock values.
What about the money Ford got from the department of energy? $5.9 million was given to them to upgrade plants. Yes the media did little to report this but Ford got money too but it was channeled through the department of energy to cover it. They are going to make even larger cuts than GM soon.
Now let’s be clear Lordstown may not be dead. Right now GM has no product ready to go in to the plant at the moment. Gam had good union relations there and they stand a good change to bid on a new product that will better fit their capacity. Same for the Michigan plants as the CT4 and 5 are coming. Also the flagship is coming. No announcements on where they could go as the union locals have to bid on these plants.
GM has done much to keep jobs here but they still have to fit things in where they are profitable.
Sorry but in this snowflake world there are always good things and bad things that are going to happen.
It was much easier when MFGs only had to compete with the cross tow rivals but now they have to deal with lower labor overseas and non union plants these 4n companies generally use.
There is even more to consider and understand that space here does not permit to cover.
The reality is running an automaker is a very difficult thing today. You have to understand and try to get product right 5-10 years ahead in an ever changing market. If you get it right you are a hero. You get it wrong you have to make corrections like these that may not be popular but still need to be done.
The bottom line is small cars are declining in sales and will continue to decline. A CUV on the same platform can double sales and sell with less rebates and get about the same mpg. It is not just chance all MFGs are making mostly CUV models.
While the Cruze was 4th in sales it was much worse in profits and was getting worse with a plant that was 69% under capacity and 49% under profitability. The adding of a Hatch fixed nothing. Adding a Deisel added nothing. Adding a SS would net about 10k units and fix nothing and may not have gained back development cost.
The killing of the Cruze production in Mexico is telling too.
This is big picture stuff in a sea of small thinking and a lot of BS in the forums and media.
Same thing applies to what CEO’s make. Few complain about movie stars and sports figures. But the deal is not everyone can run a company as it is tough and almost a no win situation with everyone. They work long hours, they are away from home. Many are in a third marriage and never see their kids. They get constant threats and slandered in the media. But it is a job someone has to do and the going rate is what it is. I would like to see it more performance related but then some will make even more cuts not just for the company.
I know this is not a popular message but it is the real world that some do not want to face.
In Capitalism there is an unfair distribution of benefits. But in Socialism there is an even distribution of misery.
Scott, your arrogance and the way you put people down, even the ones not attacking you, is mind boggling. You’re old enough to know better.
I hope she tells them to “go pound sand”.
I’ve heard people say, boycott GM. Well that may sound all well and good, but how does that help the people still working for GM and event the GM retirees? I hope they don’t close these plants or come up with something the is good for All GM employees and ALL GM retirees.
I get what you’re saying, but how does continuing to buy GM’s inferior products help the consumer? What message does it send to GM’s executives when folks (even if begrudgingly) continue to reward them? And, hey, I sell the damn things for a living … at least for the time being!
I think GM needs to learn a lesson, and the only way to get them to learn is to bleed them! Uncle Sam bailed them out, but We the People can’t afford to do that and, more to the point, have no obligation to do it either. There’s plenty of foreign automakers building quality vehicles domestically.
GM has been leaning on the American tax payer for decades. That’s about to end fast and hard!
Would love to be a fly on the wall for these meetings. Anyone see the coming Hyundai Santa Cruz?
Making millions in profits is the whole point of this exercise the by product is employing people. This is business and the cold harsh for some that like to think everyone owes them something.
These companies take investments from people to put billions to work to make millions. They repay the investors with the profits and the by product are jobs and pay for employees.
As for the Toyota Corolla investment. What tigger leaves out is the investment is about retooling the plant for the next gen car. They are now easing out of the present car. Its sales were up but they also are seeing major rebates and incentives to clear out the old model. Is this a good investment. Well time will tell but odds are they will see more growth and more profit in the Rav4.
The 4 door Mustang is a Hail Mary to see if they can save the Mustang. Few Mustang owners want a 4 door Mustang. They would be ok if they called it something else but many would rebel at the name on 4 doors. Even then it may not be enough to save it. The Camaro is facing the same issue as is the Challenger. These cars need at least 100K units a year to remain viable or they need a higher price.
FCA is not doing just fine. Yes they are doing better but they have major over capacity issue. They are also no where near as profitable per unit. A company can easily go broke even making small amounts of money on product. They really need to stop the truck incentives but that is what moves them not the big screens.
OK, when you keep repeating yourself and your lame excuses that’s a sign of your advancing years and dementia setting in. You are just making up stories. You have no idea what Honda and Toyota are questioning about future investments. We can readily see the cowardly management decision GM is making almost daily. The $10 billion share buyback was a complete waste of money, a negative return on investment which could have been spent on R&D to keep the product lines competitive. That’s how companies like Toyota, BMW, Mercedes, VW are managed.
No it is a sign that there are people foolish that are not playing with reality.
Just one look in about any parking lot and dealer lot of any company can show what the market is gravitating to and what the companies are responding with.
Yes even Honda and Toyota see the numbers for their CUV models increase as their sedans decline.
Yes we see how companies like VW are run. Diesel Gate is still being cleaned up. Toyota makes plain boring vehicles and live on with happy customers after decades of crap from the other makes. Today the models are all similar in quality but hard to win back buyers when they are still happy in a Toyota.
BMW and Benz are high end models that can operate at low volumes where cars survive. They would have the same trouble selling small low profit cars.
I repeat things because Typing slower does not help you like speaking slower does.
The thing that Toyota does well is to maintain a very diverse product lineup. They have large trucks and small trucks, Avalons and Corollas, a RAV4 and a Sequoia with a Highlander and 4Runner in between. There’s the Prius for the greenies, the fuel cell Mirai, the best-selling, “just right” Toyota Camry, F86 for the kids and the Sienna for their parents. Price wise there’s the $15,000 Yaris and the $85,000 Land Cruiser. In addition there an entire line of premium cars under the Lexus banner. Suffice it to say, no matter what happens with a person or with the world, Toyota has a car to cover it.
Among the reasons GM had to be bailed out by the US taxpayers was that they put all their eggs in one proverbial basket; big SUVs. GM was making a mint off of putting station wagon bodies on humble work trucks. They didn’t care about any other part of the market. They had a scheme to make big money and keep the bonuses coming. But, alas the good times didn’t last forever. The economy tanked, fuel prices soared, jobs were lost and suddenly you couldn’t give away a big SUVs. GM was left with pretty much nothing. Sure there were smaller GM products but they’d been ignored for years and weren’t competitive. As buyers abandoned their big SUVs, GM was sunk but Toyota, like the ever-ready Boy Scout was prepared. They merely ramped up on small and pared down on large. They survived and fared far better.
Today we see GM once again getting addicted to the easy money that comes from six words: Silverado, Sierra, Tahoe, Yukon, Suburban, and Escalade. They say those who fail to understand history are destined to repeat it. I’d say that summarizes where GM sits right now. They’re on the precipice of reliving 2009 because the economy inevitably ebbs and flows, automotive tastes, like fashion can swing quickly and dramatically. Toyota is ready for the next shift even though they probably can’t predict it exactly. GM is putting themselves is a most precarious position. Planning for 2030 is wise (with electrification and autonomous cars) but failing to understand that they have to weather several more economic storms and inevitable market shifts before arriving at that future destination is most assuredly foolish.
As I said, I hope those in our government grill Mary Barra because we bailed GM out once and it looks like they’re going right back to their addiction. She could learn a lot from watching the smart kids over at Toyota.
In the short term the Mustang is far safer from extinction than the Camaro. They still do 100K per year in volume because it’s sold around the world. The next gen Mustang (with or without a 4 dr. version) will be based on a modular RWD/AWD architecture with volume vehicles like the new Explorer and Lincoln Aviator (and probably some VW’s too). Camaro currently only has poor selling Cadillac’s as platform mate.
You are correct GM is moving the Alpha to a new platform that will accept a LHD and they too will focus on a global Camaro market. The HSV is just an early start till the new platform is ready.
Yes the Ford Mustang is going to rely on the SUV platform. Flexibility is the key to the future. GM will be using similar moves too.
The Ford VW is limited to delivery vehicles etc. if it grows remains to be seen. Ford needs help in a bad way to cut cost and their options are slimmer than most.
This comment field is always such a delightful hot mess. Kudos for Scott3 for being the voice of reason today.
Thoughts —
1. They’re are misogynistic pinheads here who clearly seethe at the very idea of a woman running GM. I don’t mind if you’re critical of her decisions. I just know that the people who considered Obama an ‘experiment’ think the same of Mary Barra. So you’re comments are useless.
2. I know they are fanbois here who can’t imagine GM being anything but what it once was. Wow. That horse has left the barn so long ago that the barn is now a Starbucks.
3. Any Trump supporter here demanding Mary keeps jobs in America is toting that thing you hate most: socialism. Mary’s job is to make GM profitable. Period. I don’t like it but then I don’t like putting corporations before people. Zippy — if you want to put people before corporations you should have voted for Bernie Sanders.
HOOOOOOOOOT MESSSSS
Barra is a “hot mess” and her decisions are inextricably linked to her being a woman. What man would concern himself with holding company-wide surveys for new dress codes, or banning the use of mobile phones while walking so employee greet each other more, or continuously going back to revise HR policies like some “helicopter” parent?
As for being a (proud, unrepentant) Trump supporter, what we’re asking for is far from any notion of Socialism. The American taxpayer paid to keep those damn factories open. We did it NOT for shareholders, but for the workers that are the lifeblood of this nation.
We paid to keep those plants open and that makes us stakeholders just as much as anyone.
We paid to keep those plants open and we want are monies worth!
I’d tell you what you could go do to yourself, but it wouldn’t be polite. Instead, why not come off your high horse and ask your fellow man if he can spare you some common sense?
We can put the people first too. But then look at Lada and how well they are doing.
You can’t put people first in a semi-fascist capitalist regime. People first means people first.
Why is are planet in peril? Because we put corporations first. Cars sounded like an awesome idea until recently. When the industry realized it was killing the planet they hired ‘climate doubters’ from the same people who asked us to doubt if tobacco is really so bad.
The LAST thing we need is GM or any car company to please Wall Street. THAT’S HOW WE GOT HERE. What we need is to dramatically reduce the production of carbon — and the best way to do that is to go green WHILE significantly reducing global population.
Either people matter or markets do. It’s amazing some think it’s still a choice. Many have kids.
The cold harsh reality is life is not fair or on a silver platter.
It is not so simple as people or markets. It is a mix of both and the ever changing effort to keep a balance. Companies can’t function with out people but then again with out companies we would all be out hunting to put food on the table.
My company just owes me a fair wage for the time I put in. They do not owe me a job for life.
My owners took the risks and spent the time building the company he is owed the rewards and profits.
If I want more than what I have the opportunity is out there and it is up to me to gain the skill and knowledge to get it.
“… a semi-fascist capitalist regime.”
“… significantly reducing global population.”
I think we’ve all heard enough of your Malthusian filth! If it wasn’t obvious before, you’re no doubt bleeding your true colors with that comment. Hey, here’s an idea you might get on board with — why don’t we begin reducing global population by starting with you and parasites like yourself?