AFSCME 3357-HOF'S BLOG

GM Announces (another) Restructuring
Four Truck Assembly Plants to Close Small Car Production to Increase, New Small Car Announced

GM CEO Rick Wagoner held a press conference today announcing a major restructuring. The bad news is that GM plans to close four assembly plants over the next two years. The good news is that GM will be adding capacity to plants that make small and midsized cars. GM will also be adding a brand new (unspecified) small car model. The new small car will (at least at first) share the Lordsville, Ohio plant with the Cobalt and G5. From our perspective more good news would be that of the four plants slated for closing, only one is a UAW-staffed plant, the perpetually on death row SUV factory in Janesville, Wisconsin. Also on the chopping block are a CAW-staffed truck plant in Oshawa Ontario, a Morraine, Ohio SUV plant (GM's only IBEW plant), a truck factory in Toluca, Mexico.

There is a surprising lack of detail regarding the small car that will start production in 2010. All that was said is that it will be built on the Delta platform, and it will be powered by a new 1.4 liter turbocharged 4-cylinder engine, making up to 140 horsepower, yet delivering 40 mpg. This type of engine appears to be the wave of the future. Ford has announced big plans for a similar engine that it calls the Ecoboost. Volkswagen has had an engine on this class on the road in Europe for a couple years now.


Finally, GM said it is considering its options regarding the Hummer brand. The brand might be sold or killed entirely.

As far as I can tell, GM made no announcement concerning May sales numbers. Analysts expect May sales to be at least 20% lower than last year's. According to the Wall Street Journal, GM's market share in the US was 20.5% in April, and poor truck and SUV sales suggest that GM's share may fall below 20% for the first time in modern history. Consider that this 20% share is split between 8 US brands, Buick, Cadillac, Chevrolet, GMC-truck, Hummer, Pontiac, Saab, and Saturn, and it becomes abundantly clear that something has to happen on the branding front, and killing Hummer is the tip of the iceberg.