GM Restructuring Highlights A Changing Industry And Union’s Role
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The latter half of this decade has brought record profits and sales to major automakers, and both General Motors and United Auto Worker union members have shared in the prosperity.
Record profit-sharing checks, high production rates, and a juiced up economy with low interest rates have led a party that’s quickly come to a screeching halt. The Detroit News reported the latest GM restructuring announcement shows how the industry continues to change, why GM needs to hire different kinds of workers, and how both the UAW and automakers need to forge a new path forward.
For years, GM stood by a few mantras, which some regard as unofficial rules to the industry: no cuts during healthy market times, build where a car is sold, and labor doesn’t dictate the products are produced. The automaker has increasingly walked away from the first and second motif. The restructuring announcement will affect up t0 15,000 employees and see four U.S. plants idled and one Canadian plant on deck to close.
The theater has only just begun as both sides will no doubt rachet up their defenses as we approach September 2019, when the current UAW labor contract expires. GM is pushing unions to help shape an uncertain auto industry where electrification and self-driving cars begin to move to the forefront.
Over time, things will likely find equilibrium again, but both sides will likely feel the pain before things get better. Automakers are busy working on vehicle portfolios that skew towards trucks and SUVs, while they ditch the idea of a balanced offering of cars and utility vehicles, and that comes with less production.
All we can do is simply watch as the future is hashed out before us, but we’re likely in for some tough times before things return to a new normal.
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No amount of spinning the truth and trying to rationalize things changes the facts that…
A) GM stole billions from American taxpayers (bailout) and then turned around kicked the average American in the arse when it fired 15,000 workers right before Christmas…
B) GM under the “leadership” of Miss Mary Barra bet on the wrong horses of China and Mexico, unlike Toyota, BMW, Mercedes, Honda, etc. who are all investing billions in U.S. manufacturing and believing in the American worker…
C) Miss Mary “Machete” Barra is a fraud and failure as GM continues to lose market share, profits dropping, quality suspect, and competitors outsmarting GM under her reign…
Time for Mary Barra to resign. She not only shamed a lot of families right before the holidays putting 15,000 Americans and Canadians out of work right before the holidays, she has drawn the ire of the most powerful person in the U.S. and world. The latter will most likely be re-elected in 2020 given the positive poll numbers so things will not be good for GM moving forward.
Time for Mary to step down. She tried, she failed, she is married to the old guard that is not in office anymore so things could get rough for GM if she doesn’t go. GM needs someone that can work with the American government, not get in fights with them. The competition will just eat GM alive.
yep, barra is finished.
Barra gets too much media praise! She ran from India and Europe instead of fixing these markets. Barra killed Holden and made GM an Americas/Chinese firm.
GM’s best bet would be merger with Honda–access to the Japanese, Asian and EU markets plus a true global brand to mate with Cruise.
Barra is the master of impression management and manipulation. She is a textbook example of what to say, how to say it, and when to say it all in a scheme to mask her incompetence.
i bet she isn’t even a stable genius. i can’t remember the last time she told everyone how smart she is. time to go.
Except 15,000 employees weren’t fired and the media (including the writers on this site) have been wrong on most of what they’re reporting. There’s been some hourly employees laid off and about 2,200 salary employees who took the Voluntary Severance Package. Almost all of the 2,200 had 30+ years at GM and were planning on retiring in 2019 anyway, so they voluntarily took the 6month/1year severance package and retired early… hardly “fired.”
Wait until January, that is when the bloodletting will commence!
I see those Chevy ads with GM employees announcing the GM discount. I wonder how many of them will be there after January 15.
Still putting lipstick on a pig. Even 5,000 people loosing their job is too many. Also, thousands of jobs will be lost at supplier plants as well.
What did GM steal exactly? It was a loan unlike what the Banks that got that was straight up free Billions with zero regulations added either. GM and other car companies had to publicly jump through hoops to obtain the loan they received but the Banks got zero shame from Politicians at all. I am so sick and tired of hearing the “GM stole taxpayers money” routine.
I’ll tell you one thing for sure. I have been a loyal GM buyer since my first new Chevrolet in 1962. I have bought in excess of 40 GM cars and trucks. But, no more. This kind of disloyalty to the United States and their workers is the last straw for me. I will not buy another GM product so long as they continue down this road.
Im curious what will you be buying? a foreign brand? FCA? it’s owned by Italians but interesting that nobody gave them hell for for disowning the USA! Ford? they are doing same stuff as GM but more quietly and not raise as much negative publicity as GM.
FCA is investing more in the Detroit areas than GM is investing in all its plants in the US. FCA is building a new assembly operation in Detroit while GM is potentially taking a wrecking ball to the city’s economy.
Not that I am defending GM but should GM be producing cars that do not sell? Isn’t that what got them in trouble in the first place?
GM is extremely smart. They see that the future is indeed in EV Transportation. Just because our Country/Politicians is in bed with Big Oil doesn’t change the fact that the EU and Freaking China of all places is pushing the EV Revolution that is about to come faster than people think. GM is getting ahead of it. They are finally doing the right thing. It is terrible that potentially people may lose their jobs but the Company cannot keep producing vehicles that are DOA in today’s market. The only two cars I totally disagree with that they are nixing is the Cruze and CT6. That Cruze maket is still viable but GM unfortunately didn’t take that segment seriously enough. The Cruze is a nice car but when you take into consideration the entire segment, it doesn’t come close to competing. It is a shame.
The other vehicle, the CT6 should not have gotten cancelled. Cadillac desperately needs that vehicle. It doesn’t matter how many copies they sell. They need it for the cache of the Brand.
Now if some of you want to get your anger out, be angry that the Big American Three (except GM) basically has almost no real EV option. Even GM with the Bolt doesn’t advertise it. Ford basically has nothing nor does Chrysler.
We are about to see an influx of Chinese company EV cars flood our streets in the next two years. This is what we should be upset about. China and Europe governments are pumping crazy cash into the EV market because they want to lead. Our Government (both sides) are arguing about Coal Mines, if Renewable energy is a farce, and where to drill for Oil. I fear that we may be leapfrogged in the Future of Energy if we continue down this path.
Now before everyone jumps down my throat about all of this, I am a guy who loves Big engined everything. If you can LS Swap something I am all for it. But times are changing and I fore one do not want to see China leading the way of Energy in the Future. And especially having China based Automakers owning the EV space in the USA, Lets all remember that Honda, and Toyota started selling cheap cars that lasted and look at them now in this market. Now I am not old enough to remeber thoselittle vehicles but I am old enough to see that Tesla started something that isn’t going away. I want GM, Ford, and Chrysler owning this space and not VW and all the China based companies that are coming. This is why I feel Mart Barra is doing the right thing. GM needs to lead and hopefully Ford and Chrysler are not that far behind.
Machete Mary’s “triple zero vision” is a recipe for failure. I would not be surprised to see her ousted in 2019.
Then why are they selling the Volt whose sales trail the Cruze by a substantial amount?
Now that the UAW members have presented there side here is the rest of the story.
GM for decades had made bad deals with the unions first because they were too big to fail. Later because no one had the balls to say no to the union or the money to say no.
The truth was GM went broke making millions of cars because it was cheaper to sell them at a loss than laying off people and paying them the 80% of their pay to stay home. The losses were less dumping the cars on fleets at a loss.
Today GM is trying to avoid this.
GM for years needed to cut models and brands and the old school leaders just kicked the can down the road.
The fact is GM payed off the loans. Obama sold the stock short and lost money. That was on Obama not GM.
Yes other brands are building plants here but most are non union. This is an advantage GM does not enjoy.
The reality is the market is contracting even with. China. The way forward is to make more money per unit sold and be more efficient in return on investment. Yes GM has had record profits but they also are faced with record development cost and stagnate stock prices as are other automakers.
Mary is the first person to do at GM what is needed even if it is unpopular and difficult. If those before her had made these move GM would never have failed.
Investing in the future is key. Not only are they looking to make cars but to sell systems to other brands who can not afford to do it them selves.
Like in the computer market Dell is not the money maker but Intel and Qualcomm that supply systems are where the money is.
If GM had killed the needed divisions before. Or invested in Saturn to where it really mattered things would have been different. Instead we had divisions working against each other and untold ways of wasting money by a damaged culture.
GM still has a lot of work to do and some tough moves to make.
You think this is bad just wait till Ford addresses the money issues there. The stock below $9 is a major problem at a time the F150 is making less per unit due to higher material cost.
FYI Ford is the one with a Six Billion dollar loan from the department of energy that has never been paid back. People tend to forget about this one. It was to invest in their plants that some will close in the near future.
the manure is really going to start flying when trump’s recession grabs hold.
remember that tax break that would spur business investment? that has turned out to be a bust. who wants to invest hundreds of millions in a factory when a tweet could upend everything.
the next recession is going to be even worse because of trump’s huge deficits.
so it looks like trump’s party is winding down. i hope everyone saved up for the coming storm.
actually it was nobama’s bailouts big time
After all, Trump has gone bankrupt 6 times, inherited all his money and isn’t a billionaire. He’s just a really good conman who has fooled plenty of people. (Trump University, Trump steaks and wine, Trump airline, Taj Mahal…)
The difference these days between a UAW plant and a non-union one is minuscule in terms of wages/benefits and work rules. The unions basically giver everything the company wants as long as they keep jobs in their respective plants.
GM is in the business to make money not cars. they can not afford to build cars that do not sell just to keep union employees working. off shore auto companies are making money here in the states but they have no pensions and unions to deal with so GM has to cut expenses to stay in business
Germany thrives with unions. GM must build cars that people actually want to buy. Malibu and Traverse don’t cut it.
unions have had an important role fighting for workers rights and against exploitation.
but today, they just seem to be guardians of mediocrity.
I suggest the anti-union crowd take a look at Germany and their union auto workers. 28 hour work weeks, check. $65 dollars an hour plus, check. Desirable–make that ENVIABLE cars–check. Corporate profits, check. German purchasing power, education, healthcare… quality of life, check mate.
Our problems are bigger than unions.
that is a good point. unions “work” in germany.
but how many of those german plants in america are unionized? how about those plants in mexico where they are paying the workers less $5/hr?
if not for the difference in labor costs between germany, america and mexico, would german workers be able to enjoy those benefits?
seems like mexican and american workers are subsidizing all those benefits you are touting.
I agree!
Unions once had a very important role in American history. Without them we wouldn’t have the 40 hour work week, PTO or many other things.
However, as of recent; unions have just become big, money hungry entities that bully non unions and their own employees.
We had an employee come and work for us (as an open shop electrician) after he left the union. He said that including taxes and dues, union workers took home just over 50% of their pay check (about 53%). working for us he made $3 less per hour, but said he was taking home much more money working the same hours.
Even Union workers are fed up. My cousin is a union contractor (not union by choice, his company decided to go union and was not able to find another job yet) and he makes less money since. His hourly wage did increase from $32 to $40, but he takes less money home after paying his dues.
GM is throwing all their eggs and money into the autonomous car basket. Unless fuel goes up only first adapters will be buying self driving cars. People don’t want cars self driving or otherwise. A spokesman for GM said it would be decades before battery operated and /or autonomous SUV’s or trucks. Well the competition is real and advanced. GM will miss the market again
gm didn’t put all their eggs in the EV/autonomous basket.
they are trying to balance the present with the future. the present is gasoline vehicles.
in 10 years, maybe EVs will be a significant share of the market but you start preparing for it now.
Trump is right about one thing, we should have never bailed out general motors, that was the biggest mistake that OUR government (bush and nobama) has ever done,
Ten years ago when our economy was in the tank thanks to President Bush, (I was laid off), Obama inherited a mess. So GM and Chrysler had to declare bank bankruptcy, Ford just barely made it by mortgaging the F150 copyright.
Without any kind of assistants, bailouts, loans, whatever you call it, it would have been tens of thousands of people out of work with a lot of factories closing. Other auto manufactures and investment firms would have picked up the pieces, of course only the profitable parts like GM trucks. Once a plant is shut down it would take a long time to get it started up with millions of dollars. I read the whole deal cost $10 billion dollars to the US treasury. But without employment, no income taxes business and sales taxes, it would have cost more.
What you don’t hear about too often, but there was one report just yesterday, is all of the suppliers that would also have had to lay off people. Look at all the truckers, car dealerships, railroads, etc. all would have lost dearly.
You have a job, thought not an auto manufacture, and your company could be in business because somewhere down the line GM and it’s employees are buy products and services that you provide.
Without a bailout, GM could have been part of Honda, Toyota, Fiat, and VW, Mercedes Benz but they lost their shirt with Chrysler. So don’t blame US companies when a foreign company couldn’t make money either with an American company.
I wonder why Trump isn’t obligating foreign car companies with UAW.
People should have a choice if they want to join a union not to be forced.
i was on a job for my company at a factory that was a union shop. I needed a shop vac to do my job and when they brought it to me I was going to plug it in. I was stopped and told I had to have a union electrician plug it in. I waited 45 min for him to show up. I asked what would happen if I plugged it in and was told the union would walk out. it was not wages that chased the auto plant out of the country it was the union work rules
Stupidity at its very best!
In that case domestic automakers should not be forced to be unionized.
Why does everyone blame GM and Mary Barra. It’s the buying public. Not long ago GM had to drop Pontiac, Oldsmobile and Saturn not because they were bad cars, people just stop buying them. GM retreated to drop cost and for the last few years sold more vehicles than ever before. Before GM loses their shirt again, GM is making adjustments to meet its market share.
I do not under stand why so many people want a SUV or crossover? I want a car and the only one i want is the Buick Regal Sport back G S. What the hell made GM build them in Germany they could have put them in Oshawa ass that is a flex plant ! I want to order one there are almost none around now it will 2 to 4 months to order one from Germany, I am totally p-off with kind of G M mentality. And I have been a loyal G M customer for over 50 years!
Here is wgat is going on.
Coupes and sedans catered to the public models that were large enough to carry 6. They had a truck that could carry a ten speed bike with out breaking it down. The roof was strong enough to carry a few sheets of plywood. It was the car and utility vehicle all in one.
The styling back then was important as was image it garnered on the owner as people were identified by what they drove.
Today most cars are non descript FWD cars that barely fit 4 people with trunks that lack openings large enough for a decent size box. Putting a sheet of plywood on the roof would do a large amount of damage. Styling is all based on aero so they all look alike.
People today are attracted to taller more versital vehicles that meet the things in their lives much better. It started with the mini van but men and women both appreciate more truck like styling over the mini van.
Even adding a hatch the low roof limits hauling. Like it or not that is what people want.
As for the Regal it had a short life expected by the time it reached market. Dying sedan sales and the fact Opel being sold pretty much sealed it was going to be a short run.
The cost of moving it here for the few sales just was not in the cards.
Also the fact Oshawa is dying has more to do with the Union and how they have not worked with GM more than the plant itself.
GM has a number of plants in the States that they have much better UAW locals to deal with than the UNIFOR.
Times are challenging now and there is much change going on. I would lov3 all performance car line ups but the reality is I just as you are in the minority anymore.
Today people want expanded utility, mpg, reliability and lower prices. Small CUV models deliver that.
The younger the buyer the lesser the love affair with the car. It is just a way to get someplace to most of them anymore. The auto enthusiast is a dying breed. I am part of the last generation where we are the majority and I am getting grey hair.
A smaller car like the Malibu or Cruze offer better MPG and performance for a lower price compared to the Trax and Equinox so that is not really true in every case. If anything the average mid size SUV/CUV like the Explorer, the upcoming Blazer, the Jeep Cherokee and the Durango are averaging well into the 40K plus price bracket and that is just a middle of the road model. Highway MPG is 22 for the Ford and 25 for the others using 4X4 models. In comparison the full sized Taurus, Impala and Charger are in the low 30K range for a mid trim model and highway MPG is 27 for the Ford, 28 for the Chevy and 30 for the Dodge with a slight decrease on the Ford and Dodge in AWD versions
The average transaction price for all vehicles is over $35k.
The Taurus, Impala and Chargers selling in the low $30k are gutted or highly rebated neither of which prove to be profitable.
As for mpg. My Acadia drive at 70 mph garners 30 mpg highway and 22 city with AWD, 310 ho V6 and the full on Denali package.
The smaller CUV models build on that mpg.
Price paid for my fully loaded Denali was $39k the smaller CUV models can be had much cheaper.
Even a crew Colorado V6 4×4 today will get 20.3 mpg as my Canyon does and the LT can be found for just over $30 well appointed. If you go 4 cylinder even more mpg.
One thing all these models will do is let you use them for more than just passengers.
70 inch TV? That will not fit a car. Dirt bike no. If the back seat folds as well as the passenger you can carry some 2×4’s but that is about it.
Well newsflash how many people drive around with 70″ TV’s around in there vehicles these days? Funny because I haven’t seen one yet. 90% of the population orders them online and has them delivered/shipped to there residence. Most people moving rent out uHauls or large cargo trucks. As for dirt bikes I would love to see you fit one easily in a CUV. The vast majority of folks driving these types of vehicles are interested mainly in sitting up high and the perceived security of 4 wheel drive that they seldom ever need or use.
You claim to have paid 39K for a top of the line fully loaded Denali Acadia but didn’t state if it was FWD or AWD. SO I’m going to assume AWD since that is how 99% of them are delivered. Well the window sticker on a fully equipped Acadia Denali on there website is well over 55 grand! And that is with a cheaper paint and not every single option listed just highlights like the full roof, a few option packages, rear entertainment, wireless charging and floor mat package. So even if you got a FWD version that was with a substantial discount which means GM lost a lot of money on that sale and it was an extreme fire sale that is very rare to get. You also failed to mention that the above cars I mentioned are also discounted heavily and that a heavily loaded high trim level version is well over 10K less than an Acadia.
I’m also in suspect of your claimed MPG with a vehicle that is quite heavy, sits up high, uses a V6 that isn’t known for great MPG that still uses an older 6 speed automatic. Anybody I know with a lower trim level AWD current 2018/2019 Acadia with the 3.6/6 speed is seeing 17-18 in city driving and 25-26 in pure highway driving. In contrast every Charger, Taurus and V6 Impala I have rented have all easily exceeded 30 on the highway and get in the low 20’s in pure city driving. And my current car, a 2017 Impala LT with the 2.5 just achieved 36 MPG on a 400 mile trip to Shelby Ohio going 75-80 MPH with 2 people aboard. Not one CUV or SUV can touch that! And I paid well under 30K for the car brand new and it it is a mid trim LT with convenience package and safety package!
CUV’s and SUV’s are priced the same as sedans. More room to move stuff not necessarily people. 50 years ago the station wagon was king and Ford owned the market because it gave you space. In a sedan try bring home a lawn mower or grill from HD or Lowes. Today sedans are so small and low it is very difficult to try to put a baby in a car seat but ITV was no problem with my 1979 Impala wagon let alone the back full of suitcases and portable cribs when hitting the road on a family visit or vacation.
If you ever drove a SUV, even a unibody version like a Murano, you’ll be surprised how well they drive, the view and much quieter than any sedan on the market except perhaps a new Impala or Cadillac. When my wife totaled out her 1999 Mustang I had her drive at the time a Highlander. It was the first front drive unibody SUV on the market. She fell in love with the size, view and comfort of a small SUV. She is on her second Murano and at 68 years old she’ll never go back to a sedan.
For the same money the SUV is a bargain for most of today’s family life styles. When Henry Ford was alive it took years and a lot of convincing to finally drop the Model T. It was what he though everyone should have but competition was winning out because they were offering what the consumers wanted. He finally conceded to drop the T and the Model A saved the company. GM is seeing market change and it it time to drop the T.
Sorry to break the Christmas cheer (!), but when I look at the last 20 years or so – you have:
Wagoner
Henderson
Whitacre
Akerson
and Barra.
It’s hard to pick ‘the visionary’ out of that lineup … the one who saw the CUV/SUV wave coming. The one who saw younger buyers falling out of love with the driving experience.
The first SUV wave (not counting the Suburban) dates back to the late 90s.
Second wave 2007-8 with Enclave/Acadia/etc..
Buick was ‘fortunate’ enough to have the Opel Mokka (Encore) to import from So Korea, and the Envision from China.
The Bolt started out in So Korea, too.
Just kind of disappointing that this changing environment slipped past 5 CEOs (even though Whitacre wrote a book about how he reinvented ATT and GM) – now Ms Barra’s left to play catch-up.
We’ll see if she can get far enough, fast enough.
Shouldn’t it read GM Restructuring “lowlights”?
Welcome to the Malaise era of the 21st century.
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