We need leaders with more vision, strategy and savvy than this," Mr. Dias said. Federal and provincial cabinet ministers have also met with senior GM officials to urge the company to find new vehicles for two Oshawa assembly plants and invest in St. Catharines, where the auto maker operates an engine and transmission plant. One of the two Oshawa factories is scheduled to close next year, while the plant known as the flex plant has no new products allocated to it.
By , in the depths of the financial crisis, that bond had disintegrated. As sales cratered and losses piled up, serious questions were being raised about whether GM and Chrysler would — or even should — survive as access to credit markets froze up.
Public and official attitudes had hardened in the wake of the collapse of the financial industry. Many objections to domestic carmaker bailouts centered on economic philosophy. Like the banks, the domestic auto industry was widely viewed as having brought a lot of the catastrophe upon itself. The Big Three still had poor reputations for quality and had long been pushing sales of high-gasoline-consuming SUVs and pickup trucks. As such, they were unprepared with smaller, more fuel-efficient models when gas prices spiked in the s and demand for their products — versus those of foreign manufacturers — fell.
Goolsbee and Alan B. Krueger in Both were top Obama-administration officials involved in the auto-bailout decision — Goolsbee had been a member of the Council of Economic Advisors and Krueger was chief economist at the Treasury Department. In the end, the officials decided the nation could not afford another big economic hit, and that if measures were imposed to change leadership, business models and labor costs, then the costs would be worth it.
There may be endless debate about how much bailout measures led to the strong industry recovery versus how much came simply from the general recovery of the economy. But 10 years later, it is worth revisiting what the bailout has meant to the industry, and where it is heading. It was true that U. GM lost market share for 30 years. There were these energy crises and there were no fuel-efficient vehicles being made by the Big Three, over and over again.
Listen to the podcast at the top of this page. Yet, that poor record had largely been reversed by the time the crisis hit. When it came to manufacturing capability, product development and supply chain management, the U. They were already in the middle of a large and successful improvement process when the financial crisis hit and they were among the victims, MacDuffie adds.
Recalled: GM is now one of the 40 most profitable companies in the nation. But the costs related to its controversial ignition switch recall essentially wiped out its profit in the first quarter of this year. GM estimates that repairs to the And that doesn't include any legal costs, fines or victim payouts that it will face. Trump has long promised to return manufacturing jobs to the United States and particularly the Midwest. At a rally near GM's Lordstown plant last summer, Trump told people not to sell their homes because the jobs are "all coming back.
Many of the workers who will lose jobs if the plants close could transfer to another GM factory where production is being increased, spokesman Patrick Morrissey said.
For instance, GM plans to add hundreds of workers at its pickup truck assembly plant in Flint, Michigan, Morrissey said. But those expansions aren't enough to accommodate all of the roughly 3, U.
GM's attempt to close the factories still has to be negotiated with the United Auto Workers union, which has promised to fight them legally and in collective bargaining. The factory announcements likely represented GM's opening bid in contract talks with the union that start next year, said Kristen Dziczek, vice president of labor and industry with the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan.
The factories slated for closure could get new products in exchange for items the company wants from the union, she said. Keeping open a plant slated for closure is not without precedent for GM.
In , for instance, GM announced that it intended to close a huge assembly plant in Orion Township, Michigan, north of Detroit. But it later negotiated concessions from the union and reopened the plant to build the Chevrolet Sonic subcompact car. The factory is still in operation and now builds the Sonic and the Bolt electric car. The reductions could amount to as much as 8 percent of GM's global workforce of , employees.
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