UAW talking to GM about impact of car sales slump on U.S. jobs
The president of the United Auto Workers union said on Thursday the union is talking with 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 as inventories of unsold cars have ballooned. Industry analysts said more jobs could be at risk as the automaker wrestles with permanently shrinking production of small and midsized sedans.
GM is reviewing whether to cancel at least six passenger cars in the U.S. market after 2020, including the Chevrolet Volt hybrid, which could be replaced in 2022 with a new gasoline-electric crossover model, Reuters has learned from people familiar with the plans.
Other GM cars at risk include the Buick LaCrosse, Cadillac CT6, Cadillac XTS, Chevrolet Impala and Chevrolet Sonic, sources said.
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: Buick LaCrosse, Chevrolet Impala, Cadillac CT6 and Chevrolet 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.
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 auto maker already has begun to shift future production plans from cars to trucks, according to Morgan Stanley auto analyst John Murphy. He estimates that fewer than 10 percent of the new vehicle models that GM will introduce over the next four years will be passenger cars, with the rest divided among trucks, SUVs and crossovers.
GM plans to add production of the new Cadillac XT4 crossover next year to its Malibu sedan plant in Fairfax, Kansas.
The company is cutting production in the short term rather than dumping cars into rental car fleets at little or no profit, company executives have said.
However, the long-term shift in demand toward SUVs calls into question the future of factories GM currently has dedicated to building sedans, analysts said.
GM said it does not comment on future products.
Alan Batey, president of GM’s North American operations, told Reuters in an interview: “I don’t think we have too many” sedans."GM SAYS `IN A GOOD PLACE`
Batey said GM intends to reduce overall inventories to around 75 days by year-end from 105 currently. “We’re in a good place to have a good 2017,” he said.
The shift toward SUVs, fuelled by cheap gasoline, is putting pressure on nearly all major automakers in the United States to simultaneously shift short-term production plans and rework long-term product programs that drive capital spending over several years.
Sales of GM passenger cars plunged 17 percent in the first half and 36 percent in June, exceeding the industry-wide declines of 12 percent in the first half and 14 percent in June, according to Automotive News.
GM dealers ended June with as much as six months supply of certain models. Two months is considered normal.
“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.”
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.