GM Poletown and Warren Transmission shuttering

[hybridy]

Very true. There’s a whole bucket of 25-30 year tenure guys at the tech center who are blue collar hourly that won’t be touched by any of this.

[313WX]

The real issue is that GM, Ford and FCA continue to bleed market share to their foreign counterparts.

Also, GM especially [[though also Ford and Chrysler to lesser extent) have a ton of excess capacity and redundancy within the employee ranks to support this excess capacity, while their foreign counterparts have managed to maximize the scale within just a small number of facilities.

I discussed this in detail in the "Incredible Shrinking GM" thread I posted a while back.

[poobert]

Remember when GM and the City of Detroit bulldozed an entire inner city neighborhood to build that plant, barely more than a generation ago?

https://www.detroitnews.com/picture-...ered/23596407/



Fuck the bastards. Should have let them go bankrupt.

Sold my shares today, at a loss, of course. Hope they enjoy their profits when they're burning in hell!

[401don]

Because they did. Mary Barra says that the public has stopped buying cars, and are focused on Trucks and SUV's. All the plants they are considering closing produce cars, and the transmission plants in Maryland and Warren won't be needed anymore if they build autonomous cars, which don't need them. But what happens if gas spikes? Do they build cars again?

I think dear Mary should have said they don't buy North American cars anymore.
May 2018 - Civic 34,349
Camry 29,965
Corolla 29,578
Accord 28,212
All 4 in the top 10 in monthly vehicle sales.
Yes, trucks/suv's are increasing their market share but sedans still sell and the Japanese continue to eat Detroit's lunch.

[drjeff]

You can thank the Dems;

NAFTA: Bill Clinton signed it into law on December 8, 1993; the agreement went into effect on January 1, 1994. Clinton, while signing the NAFTA bill, stated that "NAFTA means jobs. American jobs, and good-paying American jobs".

NAFTA was something that Reagan ran for president on and the proposal was finalized during the first Bush administration. All Clinton did was sign a done deal. So yeah, you're wrong again.

[aj3647]

So the fact that she's closong it means she gives no fucks beyond pleasing the shareholders.

GM made an extra $157 million so far in 2018 thanks to the GOP's corporate tax cut. They used most of that to buy back their own stock, thus further enriching those who own massive quantities of GM stock. But hey, tax cuts stimulate job growth, or so we were told...

[canuck]

With Oshawa closing, etc...
Just one.more reason to buy whatever is better from the consumer's point of view. My Toyota was built in Canada, and my next one may not be, but it promises to be reliable, another Toyota.

[JBMcB]

1. There are band-new models being prepped for production. They are cancelling models that are loosing money. They'll use the new models as a bargaining chip when the union contracts are negotiated next year. This is pretty much par for the course.

2. They are trying to get rid of an overabundance of management. When they re-org'd after the bankruptcy, a lot of the management positions got filled with promotions, so no money was really saved. They are management-heavy right now and they are trying to fix that.

The re-org after the bankruptcy wasn't really a re-org, it was cost-cutting to stay alive. THIS is the re-org that should have happened, though they doing it in a traditionally awful way.

[iheartthed]

Look.. GM is just preparing itself for a impending recession that economists are predicting will happen in late 19 or 2020. It's actually kinda smart so they don't get caught with they're pants down, like in 2007-08.

If GM gets caught in the next downturn like they did in 2009, they will not survive. However, one of the things that caught them off guard the last time around was the quick shift in consumer preferences from SUVs to cars when gas prices spiked. Hopefully they have figured out a better way to deal with a swift change in consumer preferences this time around.

[Lowell]

How quickly the time flies. Time to pull out my now ironic 1981 painting "Requiem for Dodge Main" which along with the destruction of Poletown made way for the now likely-to-close [and be demolished?] GM plant.

[bust]

I think dear Mary should have said they don't buy North American cars anymore....
Yes, trucks/suv's are increasing their market share but sedans still sell and the Japanese continue to eat Detroit's lunch.

Exactly.
Detroit may be the land of trucks and SUVs but it's foolish to imagine the world in your own image.
Go anywhere else in the world and almost everyone drives small cars.
Go almost everywhere else in the US except rural and ranch areas and you'll see fewer oversized vehicles there too.
Sure, they’re making better profits selling trucks and SUVs, but the world still drives cars.
American automakers need to figure out how to make a profit selling cars again.
The industry is cyclical enough already, subject to the whims of oil prices and the economy.
Now they plan to go all in on gas guzzlers with nary a hedge on the bet?
That sounds like a risky up and down future full of heartache.
Oil is a limited resource, much of it exists in parts of the world run by governments we can't trust as trading partners, and extracting and consuming it is devastating our environment which is already wobbling off-kilter.
Wall street has only a short-term outlook.
Who really expects the economy to remain strong and fuel prices to remain low?
What is GM's long-term plan?

[Atticus]

The realization is that people in urban areas are shifting away from owning vehicles period [[of any make and model). Ride sharing, public transit, scooters, bikes, other methods of transit, etc. are all making the urban vehicle ownership model less and less popular.

In rural and suburban areas, the traditional model of own your vehicle, park in a garage, etc. still works. The sprawl creates distances that make the transit methods described above less practical. And when you look at what people in rural and suburban neighborhoods want, you see big vehicles.

In essence, the automakers are doubling down on what the population of future buyers will want. Whether that want shifts because of gas prices remains to be seen...but either way.... the urban neighborhoods are checking out of the vehicle ownership model altogether.

[bust]

The realization is that people in urban areas are shifting away from owning vehicles period [[of any make and model). Ride sharing, public transit, scooters, bikes, other methods of transit, etc. are all making the urban vehicle ownership model less and less popular.

In rural and suburban areas, the traditional model of own your vehicle, park in a garage, etc. still works. The sprawl creates distances that make the transit methods described above less practical. And when you look at what people in rural and suburban neighborhoods want, you see big vehicles.

In essence, the automakers are doubling down on what the population of future buyers will want. Whether that want shifts because of gas prices remains to be seen...but either way.... the urban neighborhoods are checking out of the vehicle ownership model altogether.

I may as well be exhibit A for the urban demographic you describe. I bought my first car as soon as I got a learner's permit, but I haven't owned one outside of the Detroit area, opting instead for walkable urban neighborhoods and the modes you describe.

But there are a few things I think you left out of your analysis...

1) Even if cities will be characterized by more ride sharing, autonomous vehicles, and transit, cities will still be full of vehicles. If they are not personally owned, does it make sense for them to be designed to be utilitarian, to serve the primary practical purpose of mobility -- to transport people from here to there, or to be status vehicles for the land yacht set?

2) The trend has been for people to migrate from rural and suburban areas to cities and closer in, and it hasn't been limited to the US, it has been worldwide. In fact it has been much stronger in many countries than it has been in the US.

3) Don't discount how important gas prices are to large vehicle sales. The US is a major oil producer with relatively low prices and it has a big impact here. Most places don't produce oil, and there are few where it can be purchased as cheaply. It is a much more important factor there.

If GM is latching its future to big vehicle sales it's writing off most of the global market to focus on the wealthiest, and for good times. That's the Land Rover strategy, I guess. Maybe that's not really their plan. I hope they continue to develop their electric vehicles too. But if it is, doesn't that seem risky to you?

PS. I am planning to buy a 4-wheeled vehicle again soon. My first one in a very long time. It will be a car.

[401don]

In rural and suburban areas, the traditional model of own your vehicle, park in a garage, etc. still works. The sprawl creates distances that make the transit methods described above less practical. And when you look at what people in rural and suburban neighborhoods want, you see big vehicles.

True but here in suburban Toronto where I live almost every household has both spouses working and almost every driveway has 2 vehicles - an suv and a compact sedan [[usually a Civic, Corolla, Elantra, Cruise or Focus). For GM and Ford to totally abandon this segment is very risky.

[aj3647]

In essence, the automakers are doubling down on what the population of future buyers will want. Whether that want shifts because of gas prices remains to be seen...but either way.... the urban neighborhoods are checking out of the vehicle ownership model altogether.

Shorter term, in the next 20 years, yes. But the real trend is going to be the transition away from private vehicle ownership towards the use of a shared fleet of autonomous electric vehicles. And that's a race that Toyota will be likely to win. I think Uber is always planning to transition to autonomous electric vehicles by 2030 and Uber is already teamed up with Toyota. And just Uber alone will be looking to purchase millions of these vehicles as they look to dominate the market and make urban car ownership completely obsolete.

I can easily envision both GM and Chrysler being completely out of business by mid-century.

[401don]

Shorter term, in the next 20 years, yes. But the real trend is going to be the transition away from private vehicle ownership towards the use of a shared fleet of autonomous electric vehicles. And that's a race that Toyota will be likely to win. I think Uber is always planning to transition to autonomous electric vehicles by 2030 and Uber is already teamed up with Toyota. And just Uber alone will be looking to purchase millions of these vehicles as they look to dominate the market and make urban car ownership completely obsolete.

I can easily envision both GM and Chrysler being completely out of business by mid-century.

Not sure why Uber should dominate the market any more than a single rental car company does. There will be lots of service/tech/software companies partnering with auto companies. I see ride sharing taking away maybe 25-35% of the vehicle market in the first few decades but that will be more than enough to reduce the number of automakers by a third to half.

[Worldsgreatest]

Luckily with the very high demand for trade jobs in Detroit, these workers will be fine.

https://www.freep.com/story/money/20...it/1986685002/

[Worldsgreatest]

If GM gets caught in the next downturn like they did in 2009, they will not survive. However, one of the things that caught them off guard the last time around was the quick shift in consumer preferences from SUVs to cars when gas prices spiked. Hopefully they have figured out a better way to deal with a swift change in consumer preferences this time around.

The funny part of this is GM is more than healthy, this speculative talk of the company going down is bullshit fanfiction. They're increasing profitability by focusing on vehicles with better margins and new technology.

2008 was a once in 60-year global financial meltdown BTW, a regular cyclical recession which would not even come until after 2020 and would be nothing like it.

[pjbear05]

I think dear Mary should have said they don't buy North American cars anymore.
May 2018 - Civic 34,349
Camry 29,965
Corolla 29,578
Accord 28,212
All 4 in the top 10 in monthly vehicle sales.
Yes, trucks/suv's are increasing their market share but sedans still sell and the Japanese continue to eat Detroit's lunch.

Sorry ass midget mobiles, all of them, worthless if you're 6' 4", 34" inseam, and have no leg room in these crap boxes.

[LongGone06]

I think dear Mary should have said they don't buy North American cars anymore.
May 2018 - Civic 34,349
Camry 29,965
Corolla 29,578
Accord 28,212
All 4 in the top 10 in monthly vehicle sales.
Yes, trucks/suv's are increasing their market share but sedans still sell and the Japanese continue to eat Detroit's lunch.

Not true, 401don.

"Sales of passenger cars took a major hit in July with Toyota, Honda and Nissan reporting steep declines for their sedan sales." WSJ Aug. 1.

"Sales cratered in September. Toyota Motor Corp.’s dropped 10 percent... amid the shift in demand to SUVs from sedans and other models..." Bloomberg, Oct. 2.

"Toyota is slowing down production of the Camry, the top-selling car in the U.S. for 16 years running, underscoring the ongoing slump besetting sedans." Automotive News, Nov. 16.

[313WX]

Not true, 401don.

"Sales of passenger cars took a major hit in July with Toyota, Honda and Nissan reporting steep declines for their sedan sales." WSJ Aug. 1.

"Sales cratered in September. Toyota Motor Corp.’s dropped 10 percent... amid the shift in demand to SUVs from sedans and other models..." Bloomberg, Oct. 2.

"Toyota is slowing down production of the Camry, the top-selling car in the U.S. for 16 years running, underscoring the ongoing slump besetting sedans." Automotive News, Nov. 16.

How does that disprove 401don's point?

[Meddle]

I hate SUVs [[Mom-Mobiles) and I'll never have one. But I never have and never will buy a 'new' car from a dealer either. 'The prices is just too damn high!'

But it's not just a $500/month or more car payments that makes me say that. My auto insurance way out here in the boonies on two twenty year old cars is close to $100/mo with minimal coverage. I can't even imagine what it would be on a new Mom-Mobile in the city.

[EastsideAl]

This is really going to hurt the east side and Macomb County. More for the wider scale ancillary losses that from the direct losses of jobs in these plants themselves. A real gut punch, that very well may serve to stall a lot of our progress here, but also a gut punch we should have seen coming.

As some here have already said, the global automobile market will be undergoing a massive change in the next couple of decades. It looks like GM is using their current profitability to move towards the adaptations they will need to make to survive in that future. For now that means closing plants that are building cars, which aren't selling anyway, closing plants that are specialized in making components [[transmissions) that won't exist in the next generation of vehicles, and, not so incidentally, fulfilling their prime fiduciary responsibility for "shareholder value" and giving their sluggish stock a healthy boost. For now they preserve those plants that are building the currently popular and profitable SUVs and pickups, but I wouldn't expect those to weather another big downturn either.

As much as I loathe Trump and think his tariff policy poorly thought out and counter-productive, I think the citing of these tariffs by GM as part of the reason for these closings is really just an easy short-term political cover for something that was very likely to happen anyway. And NAFTA, or any other trade agreement, probably doesn't matter very much now either. Mostly this is about survival in an industry that is about to undergo a profound change.

In the long term, I think the prospects for continued auto production in the US are grim, as indeed they probably are for any of the world's high wage and high land cost countries [[Canada, Western Europe, Japan, etc.). Cars will follow the production trends of most other technology industries in the world. The next generation of increasingly high technology based [[and much less mechanical) vehicles will be built mostly in new facilities that will be located elsewhere, will employ many fewer people, require much less skilled labor, and will build vehicles that are much less likely to be privately owned and operated.

[stasu1213]

GM doesn't have to close a plant just for transmissions wont exist in the next generation. GM just have to begin retooling and redesigning it's plants to adapt to the future technology of cars when or if that day will come. I felt back in the 80s that building a Poletown Plant would be disasterous if the plant closes then there is another closed building that would be good for nothing. It goes to show who were bought and paid for by the car company. Coleman Young and those on the council didn't care about preserving neighborhoods and communities but more concern about temporary fixes to these areas.

[Johnnny5]

Originally Posted by Johnnny5

"Blaming tariffs for these closures is ridiculous. If anything, the lack of tariffs is what is responsible for them. There's simply no way American [[or Canadian) factories can compete with the minuscule wages and benefits South of the border, and as expected I don't see any G.M factories in Mexico on this list!"

That argument only flies if GM was shifting plant production at these facilities to Mexico or some other country. It isn't. It's ending the production entirely. And yes, they SPECIFICALLY cited the tariffs as part of the reason, since the tariffs drove up the cost of producing vehicles by several hundred dollars due to increased steel and aluminum prices.

No, it's totally relevant in this instance. Over the last 5 years GM has rapidly expanded their production facilities in Mexico [[And China) spending billions in the process. Now they're closing multiple factories here in Michigan, Ohio and Ontario. Without the expansion South of the border the facilities in Warren, Lordstown, Hamtramck and Oshawa could have been repurposed to handle that production, instead of facing closure.