Why General Motors Likely Won’t Allocate New Vehicles To Idled Production Plants
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We won’t know what will ultimately become of the four General Motors plants scheduled to go idle next year until the automaker and United Auto Workers hash out a new labor agreement, but it will certainly be a wild ride to watch from afar.
While many have speculated that GM could use the possibility of shutting down plants as a massive bargaining chip, it’s not a simple solution to allocate vehicles to production plants. Aside from the typical roadblocks such as massive investments and retooling, there’s one major reason why Lordstown and Detroit-Hamtramck could ultimately shut down: GM’s nationwide plant capacity.
The automaker will still operate four underused car plants in the United States, even with Lordstown and Detroit-Hamtramck offline. The plants are Fairfax, Kansas, Lake Orion, Michigan, Lansing Grand River, Michigan, and Bowling Green, Kentucky. How underused are the four plants combined? In total, they have the capacity to build 800,000 cars per year. This year, they’re on track to build just 360,000 cars.
The industry standard for an automobile production plant is 80 percent capacity used, but the four plants fall far below the safe figure. Lansing operates at 33 percent, Orion runs at 34 percent, and Bowling Green operates at just 27 percent. Fairfax boasts a 48 percent utilization rate, thanks to Cadillac XT4 crossover production. The other three plants build sedan models and smaller cars.
Thus, if GM does have new product up for allocation in the United States, Orion, Fairfax, and Lansing could see it first as they’re scheduled to stay open and remain underused. But, they’d also need significant investments to build new crossovers or SUVs, perhaps aside from Orion, which builds the Chevrolet Bolt EV on a special electric-car platform.
The remaining car production sites could spell more cuts in the future, according to analysts. And compared to rivals, GM operates three more car plants than Ford and Fiat-Chrysler Automobiles.
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For GM to cry poverty and scream overcapacity in the US is a crock. GM is importing 500000 cars a year from Mexico, S. Korea, China et al. Move production to the US. After all Machete Mary said “we will build em where we sell em.” Plus GM could build the Trailblazer in the US or Canada to compete with Wrangler and Bronco. I guarantee the UAW will not walk away from the table with at least a commitment to keep Lordstown and Hamtramck in warm idle for future production possibilities. Those two plants are far too strategically important to the UAW.
It is not hard to fill these plants if GM will spend some money retooling them.
Trax, Encore, and any GMC or Cadillac variant could be built in Lordstown.
Hamtramck could build the BOF Trailblazer and GMC variant, as well as Blazer overflow.
Oshawa could build full-size pickups moved in from Mexico and perhaps some Tahoe Yucon overflow.
Fairfax could build the Envision.
Lansing Delta could build a Buick CUV to slot between Envision and Enclave.
Orion could be the electric car Center of Excellence when/if they introduce them.
Remember Machete Mary said two other plants outside the US will close. This could play in the decision as well.
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