Major GM restructuring underway


#1

GM’s closing down several plants, dropping several cars as a result:

Here’s more info:


#2

Lordstown has been the red-headed step child of GM for a long time. It has flirted with closure for at least 30 years. And Hamtramck isn’t much better. The transmission plants at Warren and Baltimore are collateral damage from closing the other 3 assembly plants.


#3

The Oshawa plant has been making cars for over 100 years. It started out as the McLaughlin Motor Car Company (which also built Buicks under license) and in the 30s was bought by GM to be the GM Canada manufacturing center. I actually met “Sam” McLaughlin (son of the founder) when he was in his late 80s The Mechanical Engineering Building at Queen’s University in Kingston is called McLaughlin Hall since Sam was the major donor.


#4

What can I say? I’ve been driving GM cars since I was 18 but I fear my last one is in the garage, freshly waxed and polished, oil changed, and ready to roll. I’d better take care of it. Maybe they’ll start making refrigerators again like the old days since cars are off the table.

It would have been interesting to see the faces of all the auto engineers when she explained the new company core values are zero crashes, zero emissions, and zero congestion. Translated into zero drivers, zero buyers, and zero jobs. There has always been a fine line between visionary and insanity so time will tell. Like Lutz said though, GM was a parts company not a car company so what the hey if they sell Ford parts, or Honda parts, what difference does it make?

“Grampa, what was GM? Oh years ago they used to make personal transportation pods called Oldsmobile, Pontiac, and Chevy. Then they decided to make robots and software. They finally fired their CEO but it was too late. She had sold everything already, so now it’s just a bunch of empty buildings. Too bad, those personal pods were fun to drive. Drive? Grandpa, what is drive?”

Somehow I’m just trying to comprehend how shutting plants down and laying staff off is an “investment” in the future, but I’ve run across people like this before. They say to some, “change is hard”, but good change is not hard. Bad change indeed is hard.

Hey Mary, got any idea why your cars aren’t selling? I’ve got one in the garage I’d trade for a new one tomorrow if you still made them. Give me a call and we’ll talk about it.


#5

Overreact much, bing? GM and many other manufacturers are giving the public what they want, more trucks and SUVs and less cars. Ford, FCA, Toyota, everyone in the auto business is doing it.


#6

Be nice now JT. But explain how more trucks and SUVs fit with her vision of zero crashes, zero congestion, and zero emissions? Correct, it doesn’t. Her vision is something else entirely, not more trucks. And don’t you ever shiver a little bit when someone says “everyone else is doing it”? History is littered with folks doing what everyone else has done.


#7

Until they spun off Delphi in `96 (which went bankrupt in 2005), I’d say that’s correct. Afterwards, not so much.

I’ve seen my hometown go from 6 GM divisions down to one joint venture. Frigidaire, Delco Air, Delco Moraine, Delco Products, Inland, GM Assembly Division and the Moraine diesel engine plant. That’s 7 but Frigidaire shut down before the assembly plant started in the same facility. At one point GM had over 22,000 salaried and hourly employees. Now there are about 750 working at a GM-Izuzu joint venture making Duramax engines. Everything else was closed or sold.

Most all GM parts divisions made non-automotive parts and made lots of money at it. The plant that employed me made fractional hp to 200 hp electric motors and locomotive generators and grinders for Sears. All divisions pretty much stopped non-automotive business starting with the closure of Frigidaire in 1979. A lot of these businesses were profitable, they paid the light bills, they sold product when the auto industry was down. Diversification - smart business. But that was all done away with and GM’s fortunes drifted away as well.

Don’t get me wrong, Gm’s cars were junk by comparison to the imports in the 70’s, 80’s and 90’s. Finally deciding that building quality cars and trucks was required if customers were to part with their hard earned cash. My worst and best quality cars were made by GM many years apart. The quality got much better, but they never were able to deal with the unions and pensions. That took bankruptcy.


#8

Right. They’re not saying they will build more trucks. What is being done is elimination of less desirable models while continuing to build more profitable and desirable trucks and SUVs to fund the future direction. Will it work out? We’ll see. Nothing ventured, nothing gained…


#9

Bull. GM buyers are down because they chose short term profit spikes in the 80’s and 90’s at the expense of customer loyalty by producing junk and selling it to the public as though it weren’t.

Then after the government overly-generously bailed them out of bankruptcy a decade ago, they drove away more customers by refusing to honor warranties on cars from before the bankruptcy, which they had every legal right to do, but it was a bloody stupid move from a customer retention standpoint.

It frankly amazes me that anyone at all is crazy enough to buy GM products at this point. Sure, the cars are better now, but when’s the next bankruptcy coming that’ll invalidate my warranty again?

I know Mary Barra is a popular whipping-boy - in fact it’s pretty transparently obvious that she was given the nod as CEO to take the fall for the ignition cylinder scandal with the assumption that she’d get forced out and a man could take over again, but to everyone’s surprise she survived it. And she’s still here, still trying to make up for the past mistakes of her predecessors who, much like what I was talking about in the electric car thread, can’t be bothered to see more than 1 quarter ahead and therefore screwed the company’s positioning for the future.


#10

General Motors shutting plants , Ford dropping several models , foreign built vehicle with domestic name plates increasing in price because of a trade dispute , The fiat / Chrysler unsuccessful venture , Volkswagen cheating and various other problems with recalls .

All of this is going to really harm the US economy and the elected leaders have proven to be clueless .


#11

Just to play the contrary role for a moment, I’d like to ask the folks who have raised so many arguments about why GM is doing the wrong thing to review the list of inquiries we have been seeing from people who have all sorts of car issues. Do you truly think most of these folks are totally committed to the idea of car ownership? To me it seems like they would be delighted not to have to deal with these things they own, but they also don’t want to lose their freedom of movement. If GM (and Ford and Fiat/Chrysler and Toyota and Nissan and on and on) can come up with something that will get them where they want to go, when they want to go, without the hassle of owning and maintaining a vehicle, they’d jump on it. Who wants to fight through traffic every day to commute, take the kids to school, shop?

We’re fans of cars and trucks, but most drivers are not. Give them a way to get around and still burp, pass gas and smoke in private, call their friends, come home a little drunk, take a nap, go over something from work, talk to the kids about school, watch a movie. The ability to do that is coming right up, and GM wants to be there with a profit making product.


#12

I have had no problem with warranties on my Pontiac at all and they don’t make them anymore. And I’ve gotten a couple recall notices over the years just like normal. If the recall applies to me, I get two weeks Sirius radio again for taking it in. No complaints at all. Maybe it is the dealer?


#13

As one tall, opinionated Brit once said “GM is a pensions and healthcare company which sees the car making side of the business as an expensive loss-making nuisance.”


#14

There is some truth in that. Due to the exceedingly generous health care packages for GM workers and their ,families there was more Blue Cross in a car than steel in terms of value. One of the reasons the Canadian operation was so successful was the health care basic package, worth at least $12.50 per hour was free due to the universal government health care in Canada. GM only had to provide drugs, and dental .

In the 80s someone calculated that a Detroit made car had approximately $400 worth of Blue Cross, $400 worth of steel, and $400 worth of ADVERTISING in it!!!


#15

A few years ago we were discussing the average annual income of a GM worker at something like $80,000 with overtime and including benefits. Of course then the big crash and burn. I get onto the Ford site once in a while and holy smokes, with their tiered wage system, the new folks hardly make minimum wage anymore. Two extremes I guess. There must be a pay scale in between that allows people to earn a decent income in unskilled work but still allows a reasonable profit. One thing for sure though we can’t compete with the wage scales in Mexico or China and still make a living. It’s not good for us or US. I still hold that these under-developed countries need to build their own markets as well as exporting to more affluent markets.


#16

On the other hand, they could afford that compensation when they agreed to provide it. They stopped being able to afford it because they chose to make a bad reputation for themselves and drive customers away. That’s not the union’s fault.

One thing that fascinates me is that oftentimes it’s the same people claiming the big bad union is killing GM as are saying that the 2007 housing market collapse was entirely the fault of the homebuyers who bought more house than they could afford, and not at all the fault of the banks which convinced them to do it and monkeyed with the numbers to make it legal.

I mean, which is it? GM agreed to provide something in exchange for labor, and that’s somehow labor’s fault?

@Bing

I have had no problem with warranties on my Pontiac at all

I don’t recall what year Pontiac you drive. They refused to honor warranties on “old-GM” cars once they dissolved “old-GM” and became “new-GM.” They did not refuse to honor warranties on Pontiacs just because they stopped making them.


#17

I bought mine in 2010. I don’t remember when GM went bankrupt. Maybe before that. They might be drawing the line on liability issues though. I dunno but I didn’t have any trouble with a cat replacement and a couple recall issues.

While true they had some quality issues, I don’t think their reputation was the whole issue. Everyone got caught flat footed with the gas crisis and the imports were eating our lunch because they had the small cars then that people wanted. I don’t necessarily agree with Lutz but he blamed the EPA for destroying the auto industry by favoring foreign competition. Sure everyone made junk, even Toyota with their fenders flapping in the breeze in the old days. But actually the only bad car I ever had was the diesel Olds and I went 480,000 miles in that one (a couple engines of course).


#18

Yes, it was the year before that. You were covered because you bought a car from a “brand new” company!

That’s definitely true, but it has nothing to do with bad fit and finish, which GM had in spades back then.

From a certain point of view, he was right, if by “favoring foreign competition” Lutz meant "set standards that US makers could only have met if they had been doing their R&D job like everyone else had been.

From another point of view, he was only right because America decided to stop innovating, and let other countries catch up.

We put men on the moon in 1969 and GM was still putting carburetors in cars in 1990. The mind boggles.


#19

People buy what they want. I liked them, you didn’t, that’s OK. I dunno what they were putting carbs on though in 1990. Both my 86 Riviera and Park Ave. were fuel injected 3.8’s. Of course my 81 Diesel was fuel injected but the gassers were carbs.

It’s not just GM though. I hate to see any grand old company lose it’s footing like GE, Kodak, Chrysler and others. I’m quite sure there were insiders trying to redirect but were shuffled off to the side. It’s been happening in other industries too so hang on.


#20

Honda had a carbureted car in 1990 too, believe it or not.

I don’t think GM’s lack of quality is the only issue for the bankruptcy. Ford didn’t go bankrupt. I’m not a “GM guy” or a “Ford guy”, but as far as I can tell the quality, reliability, etc Ford vs GM is comparable. They both made some good models, and they both made some turds. And I imagine this is still true today!