GM may kill 6 car models as it works with UAW to tackle sales slump

The president of the United Auto Workers union said on Thursday the union is talking with General Motors about the potential threat to plants and jobs from slumping U.S. car sales. GM's response will be more trucks and SUVs, and sources say at least six slow-selling car models may be killed off.

"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.


COMING ATTRACTIONS: TRUCKS AND SUVS

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 IT'S '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, fueled 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."

Reporting by Paul Lienert and Nick Carey in Detroit





https://finance.yahoo.com/news/gm-ma...131700016.html

 

Oh man... But who's to say the current crossover/SUV craze will last forever? Toyota spent a lot of time and money on the new Camry and the new Avalon is on the way, while Honda also worked hard on the new Civic and Accord models. Maybe the Japanese carmakers aren't so eager to follow trends.

 

CT6 isn't going anywhere, and I'm sure those others won't exactly disappear either. Other reports suggest it's just the union trying to use sensationalist journalism as a show to its members that its vying for more "successful" products for its plants. Those car plants are the ones being idled/slowed down, etc.

http://www.thetruthaboutcars.com/201...death-one-car/

 

Looks like GM is gonna kill US production of these models. But don't worry, they will just import the China built Lacrosse and CT6.

 

people want space and ease of loading/unloading and ease of getting in and out (obesity is also a huge factor). so sedans just can't compete on those fronts with utility vehicles. none of that's going to change so i see the slump in sedan sales as irreversible.

we're also seeing more 'blends' of styling, with tall sedans, bmw's "gran coupes" come to mind, and 'swoopy' utility vehicles (e.g., evoque) but yes, i think the 'traditional' sedan sales will continue to dwindle except for small ones which have mobility benefits in cities, but even those i think will get taller (think buick encore). and 'small' sedan designs like civic and corolla have gotten a lot bigger and will probably get somewhat taller.

finally, vehicles are expensive, and household expenses have shifted a lot to healthcare, education, cell/cable/internet/media services, so rather than buying multiple vehicles, people often want as much of a single 'do it all' vehicle as possible, again leading to utility vehicles.

 

Toyota saw the move to crossovers some time ago and made the decision to increase production of the RAV4 in North America. Come the model change for the Corolla and RAV4, Canadian Corolla production will be moved to Mexico and RAV4 production will take over that line in Cambridge, Ontario. Canadian RAV4 production for Canada and the USA will then be in 2 plants: the old Corolla line in Cambridge and the remaining RAV4 line in Woodstock, Ontario.

Crossovers are more profitable, which is why RAV4 production stays in Canada while the less profitable compact Corolla moves to Mexico.

 

No way the CT6 dies. It just came out.

The others oh well.

 

I saw that article (and similar ones) in the press, but didn't post it because official sources at GM have not confirmed it, especially for the discontinuing of the CT6. In fact, Johan De Nysschen, head of the Cadillac Division, specifically said that the CT6 was NOT going to be discontinued....that at least that part of the article was false.


http://www.wkyc.com/money/business/r...neup/458738985

Any vehicles that WILL be phased out will (apparently) not be done so until the 2020 model year. But, just the same, on the Lacrosse, to be on the safe side, I'm glad that I got my order in when I did.

 

With all due respect, I don't agree with that as an excuse. It's true that body-mass certainly doesn't help when one is trying to climb in and out of tight spaces. But a big problem is that sedans, today, in a bow to the stylists, are designed to look like coupes, with coupe-rooflines and very tight rear-seat access without banging one's head. When you bow to form over function, some things are going to suffer.

That's true to some extent. You can't spend money on a vehicle what is going to (or earmarked) elsewhere. Some families, of course (and individuals) do so, anyway, and that's one reason why we have personal debt reaching all-time records.

 

i don't understand the significance of moving x model to mexico and y model to canada? are you implying that canada is able to produce better quality vehicles than mexico and thus mexico winds up with the less-profitable corolla?

 

Cost of production and satisfying the demands of labor unions are reasons for the mix up. Corolla operates on thinner margins, so less cost and union negotiating is better for Ts bottom line.

 

gotcha. thanks for explaining!

 

What kind of sales slump are we talking about?

mainstream family sedans still sell in huge numbers.
Not everyone wants a slow, less maneuverable, higher gas consuming suv with less leg room

 

I wouldn't put any stock into Caddy's management denying plans to shelve the CT6. Of course that's what they will say. I don't think the car will technically be discontinued, it may just be allowed to live out its 6-7 yr production run and not be renewed unless market conditions improve.

Fact is that CT6 sales have been [predictably] slow. Aside from its stretched looks and some extra legroom, it has nothing going for it compared to the E-class, 5-series, and A6 which are priced in the same ballpark. Look past the leather and wood in the cabin, and you'll find a GM parts bin special. Residuals are terrible and CUE is still behind the competition. The car has few redeeming factors and sales show for it. Combine all this with a shrinking market for large sedans and it's no wonder why the CT6's future is in question.

The Genesis G90 is the car Cadillac should be making. Stately looks, high-quality interior with nice details like piping, leather dash/doors, metal buttons, etc. standard, all for $70K.

 

As mentioned above Johan De Nysschen said the CT6 among other is not going anywhere. In fact the CT6 is part of their product strategy going forward. They expect the CT6 to spearhead GM's forays into self-driving tech.

Source