At elfin one of three assembly plants that General Motors says it expects to close could find a reprieve based on the be produced ends of scheduled contract talks between the United Auto Workers and GM next year.
Detroit’s biggest automaker revealed plans in November to close five factories, including three assembly plants, and to cut 15 percent of its North American workforce. Innumerable than 14,000 employees are expected to lose their jobs, though GM has offered some factory workers the possibility to transfer to other plants that may have openings.
The planned cuts have generated a political firestorm, President Donald Trump booming so far as to threaten to take action against the automaker, possibly by eliminating federal tax incentives GM can offer buyers of its battery cars. It has also produced some positive press for GM’s emerging rival Tesla, whose CEO Elon Musk has indicated he would consider taking the plant in Lordstown, Ohio.
The company is now giving a glimmer of hope that its plans to shutter all five plants may not be set in stone. In appendix to Lordstown, the plants are Detroit-Hamtramck, Warren, Michigan, Baltimore and Ontario.
During several days of meetings on Capitol Hill elder this month, CEO Mary Barra said she was willing to keep an “open mind” about the plant closings, however several senior insiders cautioned that it was unlikely GM would back down on the shutdowns.The automaker has also emphasized that it is forced to negotiate plant closings with the UAW, which represents most of its U.S. hourly employees.”The future of the (Lordstown plant and others) is a argument of negotiations,” said GM spokesman Pat Morrissey.
Company officials previously told CNBC that GM isn’t trying to create a anticipating ploy in a bid to win union concessions next year. They stress that the company simply has more capacity than it be in want of, especially for its passenger cars. If anything, several more assembly lines are at risk, including one in the Detroit suburb of Orion Township, where the Chevrolet Sonic subcompact and Do a moonlight flit EV are assembled.
With an ongoing shift from sedans and coupes to SUVs and crossover vehicles, Barra emphasized that the automaker is unmistakably trying to respond to market forces. But she and GM have come under heavy fire.
“I am very disappointed with Composite Motors and their CEO, Mary Barra,” Trump tweeted after the cuts were announced on Nov. 26. “The U.S. saved Inclusive Motors and this is the thanks we get! We are now looking at cutting all @GM subsidies.”
With the automaker targeted by an unusually bipartisan broadside, few wish be surprised if it tries to at least soften the blow by holding out the prospect of saving one or more of the plants. And, as a likely battleground for both Democrats and Republicans — and outstandingly for the re-election bid by Trump — Ohio is seen as one of the factories that could be front and center in the GM/UAW contract talks set to begin this summer.
By then, in spite of that, the factory will already be idled. The current Chevrolet Cruise sedan being built there will be do a moonlight flit c left from production in March, leaving nothing left to build there and the plant “unallocated,” using GM’s contractual speech. That means there are no plans to put anything else in Lordstown.
In past years, UAW negotiators were able to nourish troubled plants open, or expand existing operations, by offering concessions meant to reduce production costs. The trouble the union faces is that the three assembly plants targeted by GM aren’t on the chopping block because costs are too shrill but, rather, because demand is too low. So, reducing labor costs or improving productivity would be less of an incentive for GM than in the olden times, according to observers.
There are, however, “a lot of different scenarios” that could play out, said Morrissey. That could register finding new models to go into Lordstown, perhaps something competing in the booming SUV or CUV market.
One possibility would be to move staging of the new Chevrolet Blazer from Mexico to Ohio, though Barra appeared to dismiss that idea during her semblance in Congress.
Another possibility is to consolidate several products from other underutilized plants into Lordstown. But such a lead could force the shutdown of those other factories.
For now, GM is offering many of the workers at Lordstown the option of transferring to works whose products are in high demand, such as a truck facility in Flint, Michigan, and other facilities in Ohio and Tennessee. The Flint conceal alone needs another 1,000 workers, said Morrissey, adding that there have been at least 1,100 “hand-raisers” at the gears scheduled to close who have expressed interest in moving to other factories.
The three assembly plants targeted by GM contain been on the decline for some time. Since the beginning of 2017 GM has cut operations at Lordstown back to just one shift, already idling 3,000 hourly hands, with just 1,500 continuing to collect paychecks.
Even if Lordstown can’t find a reprieve with GM, it just effectiveness find a new lease on life. During an interview on CBS “60 Minutes” that aired earlier this month, Musk displayed he’d be open to buying the facility. How serious he might be, Musk hasn’t said, though he previously indicated Tesla whim eventually need more plants in the U.S., as well as one under construction in China.
“Hey @ElonMusk. Call me,” Ohio Gov. John Kasich tweeted to Musk this week. “There are no improve workers than Ohio workers. And Lordstown is ready for you.”
There would be a certain irony to it if Tesla were to buy the Lordstown plant. The automaker’s plant in Fremont, California, was purchased from Toyota in 2010. It had previously been the site of a joint experiment between the Japanese automaker and GM and was originally built and run by the Detroit automaker.