UAW 'talking' to GM about impact of car sales slump on U.S. jobs
The president of the United Auto Workers union expressed concern on Thursday about the impact of slumping U.S. car sales at General Motors Co
"We are talking to (GM) right now about the products that they currently have" at underused car plants such as Hamtramck in Michigan and Lordstown in Ohio, and whether they might be replaced with newer, more popular vehicles such as crossovers, Dennis Williams told reporters.
"We are tracking it (and) we are addressing it," Williams added.
GM has cut shifts at several U.S. plants this year to offset rapidly deteriorating car sales. Industry analysts said more jobs could be at risk as the automaker wrestles with how to permanently shrink production of unpopular sedans.
Reuters has learned from sources familiar with GM’s plans that the company is mulling whether to phase out U.S. production of at least six passenger cars after 2020, including the Chevrolet Volt hybrid, which could be replaced in 2022 with a new gasoline-electric crossover model.
Other GM cars that could land on the chopping block, the sources said, include Buick LaCrosse, Cadillac CT6, Cadillac XTS, Chevrolet Impala and Chevrolet Sonic.
GM said it does not comment on future products.
Even as President Donald Trump promotes job creation in the U.S. auto industry, Detroit-based GM may have to further slash production of sedans and build them at fewer U.S. plants, analysts said. They noted that consumer demand has been shifting rapidly to SUVs and trucks, while GM has reduced sales to rental car fleets.
GM must "create some innovative new products" to replace slow-selling sedans "or start closing plants," said Sam Fiorani, vice president of AutoForecast Solutions.
The automaker this year overestimated demand for family and luxury sedans, then produced too many. It had bloated inventories of unsold vehicles at the end of June, as much as six months of supply in some cases. Two months is considered normal.
With the overall U.S. auto market expected to decline this year to less than 17 million units, analysts said GM may have too many passenger car nameplates and too many underused assembly plants.
“There could be some consolidation” of passenger car production in fewer U.S. plants, said Jeff Schuster, senior vice president of LMC Automotive. “GM doesn’t need all the sedans it has today. They should look at reducing the number of sedan offerings and replacing some with SUVs or crossovers.”
“I don’t think we have too many” sedans, Alan Batey, president of GM’s North American operations, told Reuters in an interview. Batey added: “We’re in a good place to have a good 2017.”
Despite heavy discounting by some dealers, sales of GM passenger cars plunged 17 percent in the first half and 36 percent in June, far exceeding the industry-wide declines of 12 percent in the first half and 14 percent in June, according to Automotive News.
Batey said GM intends to reduce overall inventories to around 75 days by year-end. On July 1, GM car inventories shot to 126 days from 95 days on June 1, according to Automotive News.
Some analysts have singled out GM’s Hamtramck plant in Detroit as one of the most vulnerable because of plummeting car sales. The plant, which opened in 1985, builds four slow-selling models: LaCrosse, Impala, CT6 and Volt. In the first half, it built fewer than 35,000 cars, down 32 percent from the same period in 2016, according to suppliers familiar with GM’s U.S. production schedule. The typical GM assembly plant builds 200,000-300,000 vehicles a year.