GM Cuts 6 Models, 5 Factories and 15% of Workforce

[Gecko]

GM to cut production and jobs in North America, kill 6 car models

DETROIT/WASHINGTON — General Motors will cut car production, stop building several low-selling car models, and slash its North American workforce, sources said on Monday, marking its biggest restructuring in North America since its bankruptcy a decade ago.

GM plans to halt production at three assembly plants in Canada, in Ohio and Michigan in the United States by not allocating new products, putting the future of those plants in doubt, the sources added.

The plants, Lordstown Assembly in Ohio, Detroit-Hamtramck Assembly and Oshawa Assembly, all build slow-selling cars.

The issue will be addressed in talks with the United Auto Workers union next year. GM Chief Executive Officer Mary Barra made calls early on Monday to disclose the plans, the sources said.

GM declined to comment ahead of an expected announcement. Its shares were up slightly at $36.21 in early trading.


Fewer models, fewer jobs
GM is expected to announce it will cut the Chevrolet Volt, Impala and Cruze, the Cadillac CT6 and XTS, and the Buick LaCrosse, according to a source familiar with GM's plans.

Cost pressures on GM and other automakers and suppliers have increased as demand waned for traditional sedans. The company has said tariffs on imported steel, imposed earlier this year by the Trump administration, have cost it $1 billion.

A Canadian union, Unifor, which represents most unionized auto workers in Canada, said Sunday it was informed by GM that there would be no product allocated to the plant in Oshawa, about 37 miles (60 km) from Toronto, after December 2019.

GM employs about 2,500 union staff in Oshawa, which produces both the Chevrolet Impala and Cadillac XTS sedans. It also completes final assembly of the stronger-selling Silverado and Sierra pickup trucks, shipped from Indiana.

GM has begun what is expected to be a long and expensive transition to a new model that embraces electrified and automated vehicles, many of which will be shared rather than owned.

The No. 1 U.S. automaker signaled the latest belt-tightening in late October when it offered buyouts to 50,000 salaried employees in North America, with the aim of reducing headcount by 18,000. It plans to trim executive ranks by 25 percent, the source said.

With U.S. car sales lagging, several car plants have fallen to just one shift, including its Hamtramck and Lordstown, assembly plant.

A rule of thumb for the automotive industry is that if a plant is running below 80 percent of production capacity, it is losing money. GM has several plants running well below that. Consultancy LMC estimates that Lordstown will operate at just 31 percent of production capacity in 2018.

Rivals Ford Motor Co and Fiat Chrysler Automobiles NV have both curtailed U.S. car production. Ford said in April it planned to stop building nearly all cars in North America.

Source: https://www.autoblog.com/2018/11/26/gm-production-cut-oshawa-chevy-impala-cadillac-xts/


Perhaps I'm missing some, but with this news, GMs only remaining sedans would be the Chevrolet Malibu, Buick Regal, and then the upcoming Cadillac CT5 and CT4?

 

[Ian Schmidt]

Been waiting for this since Ford announced they were going more or less SUV-only. The increase in R&D for EVs and driver assistance is smart too.

Perhaps I'm missing some, but with this news, GMs only remaining sedans would be the Chevrolet Malibu, Buick Regal, and then the upcoming Cadillac CT5 and CT4?

That sounds right. Buick dealerships would be pretty sparse then, or at least any that aren't also GMC. At least Chevy still has the Vette.

 

[Gecko]

I know I've said it before, but I am still struggling to understand how the GMC brand survived the bankruptcy, and even now, is still on the table. They should just have Denali trims of Chevrolet SUVs and then the GMC brand becomes unnecessary.

I know a lot of the Cadillac, Buick and GMC dealerships are tied together under one roof, and at this point, losing so many sedans might make it such that the GMC business is keeping the other two afloat.

I don't see a reason that GM can't just be Chevrolet and Cadillac. I know the Buick business has been big in China and has also seen a resurgence in USA, but I think the revitalization of Buick is a big part of what has prevented Cadillac from growing. Enclave could very well be a Cadillac product, and the rest of the lineup is pretty lackluster and unnecessary, especially if they're now ditching the LaCrosse.

Buick is a near-luxury brand like Mercury was, and Ford finally realized that they needed to focus on Ford and Lincoln without the middle man. Granted, Buick has been a lot more successful than Mercury was.

I think the Buick brand is still viable when you look at the numbers, but as the market is shrinking and transitioning, I just wonder how much overlap is really necessary. It would make more sense to see GM focus on two product lines - mainstream and luxury - and build those products up to be as well engineered and packaged as possible.

One thing I do believe is that Marry Barra is a very savvy business person, and if such calls are to be made for the future, she'll make them.

A lean and purpose-driven lineup IMO would be:

Chevrolet:
Trax
Equinox (+ Denali Trim)
Blazer (+ Denali Trim)
Traverse (+ Denali Trim)
Tahoe (+ Denali Trim)
Suburban (+ Denali Trim)

Sonic/Spark
Bolt
Malibu
Camaro
Corvette

Colorado (+ Denali Trim)
Silverado (+ Denali Trim)
Silverado HD (+ Denali Trim)

Cadillac:
XT3 (based on next gen Trax)
XT4 (based on Equinox)
XT5 (shared with Blazer)
XT6 (Enclave rebadge)
Escalade
Escalade ESV

CT4 Small/Midsize "tweener"
CT5 Midsize/Fullsize "tweener"
TBD Coupe

Sounds crazy, but it might make sense for the next generation Malibu to be RWD and just share a platform with CT4/CT5/Camaro.

 

[Joaquin Ruhi]

GM is expected to announce it will cut the Chevrolet Volt, Impala and Cruze, the Cadillac CT6 and XTS, and the Buick LaCrosse, according to a source familiar with GM's plans.

[URL='http://[URL='http://[/SIZE'']USA Today's Nathan Bomey[/URL] laid out this precise schedule:

The automaker will no longer make the Volt semi-electric car and the Cruze compact sedan for sale in North America beginning in March 2019, Chevy spokesman Kevin Kelly confirmed.

GM will also discontinue the Chevrolet Impala full-size car, the company confirmed. It will end U.S. production in March and Canadian production in the fourth quarter of 2019...

The company will also end U.S. sales of the Cadillac XTS and Buick LaCrosse luxury cars after production ends in March. And the Cadillac CT6 will be killed off in the U.S. after mid-2019, though it will continue to be sold in China.

I can't help but wonder what happens with the upcoming and much-lauded Cadillac CT6-V. Will it be cancelled? Offered for only a few months? Will it be imported from China and see its sticker price rise significantly? Sadly, I'm betting on outright cancellation.

Perhaps I'm missing some, but with this news, GMs only remaining sedans would be the Chevrolet Malibu, Buick Regal, and then the upcoming Cadillac CT5 and CT4?

There's also the Chevrolet Sonic sedan and hatch, although they, too, may die soon. Their imminent death was predicted in a flurry of stories from April of this year. Nonetheless, it returned for the 2019 model year, unchanged and in its 3rd model year since a 2017MY mid-life refresh. I also suspect it'll join all those other nameplates not returning for the 2020 model year.

I also wonder about the Buick Regal's longer-term future. After all, it's just a rebadged, built-in-Germany Opel Insignia, and GM sold off its European Opel and Vauxhall brands to Peugeot Citroën. The related Opel/Buick Cascada convertible is another of the "dead after the 2019 model year" nameplates, at least in North America. Granted, the Regal/2nd-gen Insignia is just in its second model year, so it may be around for awhile, and still shares GM underpinnings with the Malibu.

I know I've said it before, but I am still struggling to understand how the GMC brand survived the bankruptcy, and even now, is still on the table. They should just have Denali trims of Chevrolet SUVs and then the GMC brand becomes unnecessary.

I know a lot of the Cadillac, Buick and GMC dealerships are tied together under one roof, and at this point, losing so many sedans might make it such that the GMC business is keeping the other two afloat.

I think I've also said this before, but the bean counters involved in the GM bankruptcy a decade ago (wow, it's been that long?! Time flies...) determined that the GMC division was too profitable to kill off.

In principle, I agree with you, but, anecdotally, here in southeast Florida there isn't a single Buick/GMC/Cadillac combo, and only one Chevy/Cadillac dealer. GMC/Buick dealers, on the other hand, are a dime a dozen.

Sounds crazy, but it might make sense for the next generation Malibu to be RWD and just share a platform with CT4/CT5/Camaro.

I'd love to see a RWD Malibu and/or Regal, but I'm not banking on it.

 

[Ian Schmidt]

I think I've also said this before, but the bean counters involved in the GM bankruptcy a decade ago (wow, it's been that long?! Time flies...) determined that the GMC division was too profitable to kill off..

Bean counters have no imagination. If the GMC vehicles became a Chevy trim level or option package they'd sell just as well, and would be even cheaper to make since there'd be even less differentiation from Chevys.

 

[Joaquin Ruhi]

I can't help but wonder what happens with the upcoming and much-lauded Cadillac CT6-V. Will it be cancelled? Offered for only a few months? Will it be imported from China and see its sticker price rise significantly? Sadly, I'm betting on outright cancellation.

Jalopnik reached out to GM, and learned that the CT6-V is still happening, but will only be offered for less than a year.

https://jalopnik.com/the-cadillac-ct6-v-is-still-happening-and-will-go-out-i-1830663592

 

[Gecko]

...Ford downsizing and then exploring strategic partnerships with VW
...GM downsizing and sharing R&D costs with Honda
...FCA seems to forever be in turmoil

I think wise foresight and cost management, plus the comparatively early implementation of TNGA, have helped Toyota to avert a series of public announcements like these. However, I do wonder if they'll be forced to find a partner like Ford and GM have. They already have relationships with Subaru and BMW, as well as Mazda to a lesser degree.

So much turmoil in this industry right now that it's hard to keep track. All while signs are pointing to a serious slow down or even recession starting next year.

 

[Joaquin Ruhi]

Here's a precise "end of production" chart that appeared in Jalopnik:

https://jalopnik.com/dead-the-cadillac-ct6-and-a-ton-of-other-gm-cars-1830656192

 

[Ian Schmidt]

Jalopnik also points out that this makes the CT6 the latest victim of GM's tendency to discontinue cars 1 year after they get them right (perhaps best known from the Corvair and Fiero).

 

[mmcartalk]

As someone who truly loved the current Lacrosse, if I posted what I really thought of GM doing this, Mike and Kevin would probably toss me out of the forum.

But I will say this.....your loss, GM. My money will be going to Lincoln next time (if the MKZ and Continental are not dropped) or to the Koreans for a Kia Cadenza or Genesis G80. I would have considered an Avalon or an ES350, but I don't care for what Toyota and Lexus have done to the last couple-generations of them. And I am NOT going to be forced into an SUV against my will just because it happens to be fashionable. I happen to like big, comfortable, FWD/AWD sedans, period. If they aren't fashionable right now, too bad.....that's where my money's going. For the money, IMO (35-40K), the Lacrosse was simply the most comfortable-driving sedan out there...others were close, but no cigar, even from Cadillac. If no new vehicles of that type are available any more, I will simply buy used, though I much prefer a new car.

 

[Motor]

 

[Joaquin Ruhi]

Mods: We already have a separate Garage thread on that video:

https://lexusenthusiast.com/forums/...y-genesis-sales-are-temporarily-delayed.4865/

Yes and no. Alex Dykes made two separate videos that may play back-to-back, one on the Genesis sales situation (correctly posted in the Garage Genesis thread) and another on GM and the CAFE crossover situation (correctly posted here).

 

[mmcartalk]

Yes and no. Alex Dykes made two separate videos that may play back-to-back, one on the Genesis sales situation (correctly posted in the Garage Genesis thread) and another on GM and the CAFE crossover situation (correctly posted here).

Yes.....sorry about that, Joaquin. You are correct. Those bozos at GM have got me so angry and riled up over dropping the Lacrosse that I'm at the point where I don't know what I'm reading half the time.

I'll delete my previous post.

 

[Trexus]

I agree with Gecko that Buick and GMC should be dropped and that GM should just be Chevrolet and Cadillac. Ford dropped Mercury (dead weight, did like the Cougar though) but now Ford is still hurting and discontinuing most cars with the exception of the Mustang, SUV's/CUV's and trucks which are now the bread and butter for Ford. My, my, my, have times changed.

This also presents an opportunity for Toyota/Lexus. All those potential Chevrolet customers such as the Volt, Impala and Cruze can now purchase a Prius, Avalon or Corolla. As for the potential Cadillac customers such as the CT6 and XTS can now purchase an LS 500/500h or GS 300/350. As for the potential Buick Lacrosse customers they now can purchase the ES 300h/350.

I also feel bad for all those GM employees losing their jobs however now they can come work for Toyota/Lexus.

Projected U.S. auto sales for 2018 will be 16.5 million units and for 2019 will go up to 17.3 million units and for 2020 will to up to 17.6 million units. Projected worldwide auto sales for 2018 will be 81.5 million units for 2019 will go up to 83.9 million units...man that's a lot of cars...obviously people are still buying but the trend has shifted towards SUV's/CUV's. I look forward to the new RAV4, UX and LQ...

 

[Gecko]

Projected U.S. auto sales for 2018 will be 16.5 million units and for 2019 will go up to 17.3 million units and for 2020 will to up to 17.6 million units. Projected worldwide auto sales for 2018 will be 81.5 million units for 2019 will go up to 83.9 million units...man that's a lot of cars...obviously people are still buying but the trend has shifted towards SUV's/CUV's.

Where did those numbers come from? Most of what I am seeing is sub-17M for the foreseeable future, especially as we head into an economic slowdown compounded with rising interest rates and tariffs.

 

[mmcartalk]

I agree with Gecko that Buick and GMC should be dropped and that GM should just be Chevrolet and Cadillac.

Buick sold more than 800,000 vehicles in China last year. In comparison, the Chinese don't even know the meaning of the word "Cadillac".

GMC, yes, a better case can be made for that. GMC and Chevy, with a couple of exceptions, generally sell overlapping SUVs and pickups. I don't see the need for two divisions selling the same vehicles. GMC currently serves as the "Denali" luxury-level for those trucks and SUVs, but that trim-level name could, if necessary, be transferred to Chevy, much the same way that Buick uses "Avenir" and Lincoln "Black Label".

Ford dropped Mercury (dead weight, did like the Cougar though) but now Ford is still hurting and discontinuing most cars with the exception of the Mustang, SUV's/CUV's and trucks which are now the bread and butter for Ford. My, my, my, have times changed.

I'm not convinced, even today, that Ford did the right thing by dropping Mercury. It forced the Lincoln Division downmarket into Ford dealerships (formerly they had been Lincoln-Mercury), and their image suffered as a result.

As for the potential Buick Lacrosse customers they now can purchase the ES 300h/350.

The newer ES models are well-built and reliable, but, IMO, cannot compete with the 18" wheel Lacrosse in ride comfort, sound insulation, or in plush-seating comfort. If they could, I'd be driving one instead of a Lacrosse.

I also feel bad for all those GM employees losing their jobs however now they can come work for Toyota/Lexus

Maybe, maybe not. Robots and automation actually do a lot of the former assembly jobs today....of course, not all.

I look forward to the new RAV4, UX and LQ...

So do I. I've got several requests for a RAV-4 review, and I think one of my colleagues is ready for one, since his old 1999 RAV-4 has seen lots better days.

 

[Trexus]

Where did those numbers come from? Most of what I am seeing is sub-17M for the foreseeable future, especially as we head into an economic slowdown compounded with rising interest rates and tariffs.

NADA forecasts 16.7 million vehicles sold in the U.S. for 2018 whereas Forbes forecasts 16.8 million vehicles sold.

 

[spwolf]

Unlike Ford, GM is making a good move... they made $2.5b in profits last quarter, that was excellent result... this will roughly add $6b per year to the profits and also let them invest back that money into R&D and cars that people actually want to buy.

 

[mmcartalk]

Unlike Ford, GM is making a good move... they made $2.5b in profits last quarter, that was excellent result... this will roughly add $6b per year to the profits and also let them invest back that money into R&D and cars that people actually want to buy.

Even more so than Ford with its sedan-canning announcement, GM, though, might have simply gone too far by doing this. They are now in DEEP trouble with both Trump and Canadian Prime Minister Trudeau....and probably soon also will be with the U.S. Congress and Canadian Parliament. Mary Barra, whether she likes it or not, may (?) be politically forced to rescind her decision.....Bully-Pulpits from Government can be very effective.

 

[mikeavelli]

Obviously no one likes to see anyone losing their job. That said GM is actually acting proactively here and not reactive. They don't see much of a life for these vehicles in the future.

Now here is where things get muddy for me.

Lacrosse- I for one am shocked a bit by the Lacrosse. I haven't been paying attention to sales, are they down? I know the last one did quite well.

Volt- Seems electric cars are Tesla's game right now. They didn't get this car right.

CT6- a shame a damn shame. Cadillac doesn't seem to know what the hell they are doing. They should have LAUNCHED this car with those wonderful V-8 options. You don't launch it 3 years later with them. Now they lose their flagship after one generation. I think it is beyond sad. The CTS hasn't been selling nearly as well as the last model either.

Impala- Seems more rental fleet than anything. How about make it a RWD, tough American looking sedan. I guess the Avalon is winning since this and the Lacrosse are toast.

XTS- We saw this coming awhile ago but where will these buyers go? To Lincoln? To the CTS? Odd that Lexus dropped their RWD GS and Cadillac is dropping their FWD XTS.

I guess the bottom line is, cars are dying and they are moving fast to get rid of these.