GM to make deep cuts

[PeaceNikki]

Source: National Post, Canada

GM to make deep cuts
Kevin Krolicki and Soyoung Kim, Reuters
Published: Tuesday, June 03, 2008

DETROIT - General Motors Corp., facing a sinking U.S. market for trucks and SUVs, is expected to unveil steps on Tuesday to conserve cash and cut production of slower-selling models in a bid to shore up a faltering restructuring now in its third year, according to analysts.

GM said on Monday that Chief Executive Rick Wagoner and Chief Operating Officer Fritz Henderson would make a series of announcements and take questions from reporters and analysts as part of the automaker's annual meeting for shareholders.

Analysts expect GM to confirm deep production cuts pickup trucks and SUVs in North America as consumers bolt from those higher-margin vehicles in the face of record gas prices.

CBC news reported Tuesday morning the Oshawa truck plant will be one of four truck plants closed, with 1,000 jobs lost.



Read more: http://www.nationalpost.com/news/story.html?id=560597

---

Included in the cuts will be the shutting down of the Janesville, WI plant by 2010. Our fine Senator Russ Feingold's family had a lot to do with helping bring these jobs back to WI. The town will be devastated by this closing. :( The Janesville plant employs about 2,400 hourly and 200 salaried workers. Earlier this year, GM announced plans to eliminate the second shift and 756 jobs in Janesville starting in July.

[OhioChick]

1. More bad news....

:(

[lonestarnot]

37. Bad news for jobs, good news for planet earth.

:P

[Psephos]

64. Yeah!!! Cuz now the manufacturing will shift to nonpolluting, Earth-conscious Asian factories

And the people who build them will receive far better wages, health and retirement benefits, and enhanced workplace safety, too!

Win-win!

(Too bad about all those out-of-a-job UAW workers, but they'll adjust, I'm sure.)

[mdmc]

2. cut the HUMMER line please. NOW!

I won't go near a GMC product until they end the Hummer line.

[Pale Blue Dot]

14. GM to close 4 factories, may drop Hummer

http://www.msnbc.msn.com/id/24947044/

CEO Rick Wagoner said Tuesday before the automaker's annual meeting in Delaware the plants to be closed are in Oshawa, Ontario; Moraine, Ohio; Janesville, Wis.; and Toluca, Mexico. He also said the iconic Hummer brand may be discontinued.

[liberal N proud]

18. What a bummer

I just had to say it

[DainBramaged]

21. Good, maybe you won't buy a Toyota till they drop the Tundra?

Or a Nissan till they drop the Titan?

How hypocritical can you get?

[mikeytherat]

30. Forget the Titan - what about the Armada?

http://www.nissanusa.com/armada/specifications.html

MPG:
12 city
17 highway

mikey_the_rat

[DainBramaged]

36. Or the Land Cruiser/Land Schooner (thanks Mikey!)

13 mpg city / 18 mpg hwy

[depakid]

43. Subaru has to have had the worst timing ever with their new ad

which shows a typical middle aged American couple in front of their suburban house & 2 car garage announcing that they've decided to purchase a new Forrester because Subaru has made it BIGGER!

Talk about appealing to all the wrong angles.

[tabasco]

51. Toyota has been giving Americans 40+ mpg cars for years.

GM has not.

Thanks for playing.

[DainBramaged]

52. So it's ok for them to sell gas pigs too?

You don't know how to play in my backyard.

[primavera]

68. Strawman

Sorry DainBramaged, I do respect where you're coming from, but this argument you keep raising that because foreign car manufacturers produce gas guzzlers, it somehow invalidates the more fuel efficient vehicles they're also producing just doesn't hold water. Fine, Toyota produces some gas guzzlers, just like every other car manufacturer, foreign or domestic. Production of gas guzzlers therefore isn't a distinguishing characteristic - all companies are equally guilty of it. What is a distinguishing characteristic is what other options companies choose to offer consumers in addition to gas guzzlers. Right this instant, domestic automobile manufacturers lag far behind the Japanese in offering cleaner, more fuel-efficient, environmentally friendly alternatives to gas guzzlers. I have nothing against American cars and would be only too happy to give them my business. Like a great many of other American consumers, I would have given almost anything to own an EV1 that kicked the Prius' ass. But they made the decision to not make those vehicles available, so the Prius is the second best option available right now, so that's what I drive. But as soon as American car manufacturers begin to produce cars that can compete with the Japanese in terms of fuel efficiency and low emissions, man, I will be only too happy to buy an American car. If there's an American car out there that gets better gas mileage than the 60 mpg my Prius gets and produces lower emissions, for God's sake, tell me about it, I'll go buy one today! But as long as their idea of fuel efficient is 30 mpg... I'm sorry, but that puts me in the position of having to choose between protecting US auto jobs on one hand and protecting the health of the planet on the other. Hopefully, GM will catch on soon and the jobs they lose today can be regained in a few years, building better cars. Conversely, how many jobs will be permanently lost when much of the country's coastlines are submerged in water if/when the polar caps melt?

[Jimbo S]

62. My Saturn gets in the upper 30's

Of course, some people will say Saturn is separate from GM.

[Psephos]

65. Just drove mine tonight from Lansing to Detroit and back (180 miles) on 4.6 gallons

With the air conditioning on, too.

That's about 39 mpg.

[DainBramaged]

67. Ever seen a Toyota Land Cruiser? Sequoia? How about the FJ genius?

Know what kind of gas mileage they get? Know how many Toyota has sold over the past 36 months? How about the Highlander? Tundra? Avalon? Any of these models get close to 40MPG? How about 30MPG? Let's try 20MPG maybe on a good day going down hill.


You know not what you speak of.

[PeaceNikki]

3. Further details of closings here:

UPDATE 1-GM to end work at four truck plants
http://www.reuters.com/article/marketsNews/idUSN0334749120080603

DETROIT, June 3 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research) is expected to announce that it will stop production at four truck plants in North America, a Canadian union official briefed on the plan said on Tuesday.

GM Chief Executive Rick Wagoner is set to meet with reporters for an update on the automaker's restructuring plans before the company's annual meeting on Tuesday in Wilmington, Delaware.

The plants slated for closure are in Janesville, Wisconsin; Moraine, Ohio; Silao, Mexico; and Oshawa, Ontario, according to the Canadian Auto Workers union official, who asked not to be named.

A United Auto Workers union spokesman had no immediate comment. A GM spokeswoman had no comment.

[MrModerate]

4. These guys apparently turn to George Bush for strategic advice . . .

At every turn over the last 10-20 years, they've made their business model more and more unsustainable (in every way -- economically, socially, environmentally), turning out crappy cars priced uncompetitively and surviving solely on the American love of big iron.

Outside of the pain afflicted on their workers, their communities, and the American economy in general, I don't care what happens to these guys. They deserve to be extinct.

[Auggie]

10. Deserve to be extinct? I hope not. My folks are on a GM pension.

[NEOhiodemocrat]

25. My husband and I are on a GM pension

I am always worried about GM. Nothing like having no sense of security in your retirement.

[Auggie]

27. That's why I find posts

like "I hope they become extinct" mindless and annoying.

Did you work at Lordstown?

[Purveyor]

29. I always ponder as to what type of job/income people who makes these

statements have that doesn't depend on a healthy middle-class economy.

[Auggie]

31. I just checked...

the poster claims to be from Australia. It's possible that statement was made without thorough knowledge of what's going on here.

[MrModerate]

54. When dinosaurs die, they often crush other creatures as they fall . . .

Do I have sympathy for people who fall victim to decades of bad managment? Yes (as I stated in my original post).

Do I have sympathy for managers and owners who stupid themselves into extinction? Well, maybe a little bit, since they're people too (just well-paid people) and no single person can be held responsible for all of GM's screwups.

As companies, GM and its ilk deserve contempt. They have earned their failure. What is the social benefit in crying crocodile tears over companies who consistently make bad choices?

And FYI, Mitsubishi recently closed its only Australian plant, which failed because -- shockingly -- they offered crummy cars that people didn't want to buy, except for a limited range of high-margin vehicles that paid for the rest of the dysfunctional operation. Where have I heard that story before?

[polticalpout]

60. GM sold the most cars in the world last year and will be #2 this years, hardly a dinosaur

Toyota’s total labor costs os about $35 per hour while GM's is $81 per hour. So you assessment that Gm is a dinosaur is not even close to being on mark. The fact they have so many retirees, pay better wages, and offer better benefits is what is hurting them. So while you pile on GM you might want to take a minute and realize that they have to become more competive because people have choosen to buy toyota over GM and thus not enough $ came in to cover operation costs and earn profits.
Now what this mean is new GM workers will make much less and this will have an effect over other jobs acrossed the board not just in the auto industry. Anyone who bought a toyota should remember this when their wages start stagnating or even begain to fall, because when one of the largest companies in the world drops wages you can bet your ass others will follow.

[Psephos]

66. Do I have sympathy for economically-challenged "progressives" who piss on the middle class?

Umm, no.

[DMCarter]

35. there is no security

sept 1, 2006 I was permanently laid off from Mitsubishi air climate control along with 60 others...the reason...downsizing.. We made front hvac's for several gm autos and trucks,shipping mostly to the Doraville plant. Doraville will be closing down sept of this year and my heart goes out to all those who will be affected. Mind you, mitsubishi didn't have a nice severance package anywhere comparable to gm. we got to keep our insurance for only 30 days and were only entitled to unemployement for six months. I got terribly sick that feb,hospitalized and have been unable to return to work. We just lost our home of 18 yrs this past Jan and things are still going downhill. Every time I hear of a plant closure or a layoff I cringe. So many stand to lose so much.

[AP]

12. Designed Chaos, I bet. It's the same reason the fashion industry shifts from flares to cigarette leg

but they get to destroy the unions in between...

[AngryOldDem]

45. Do their workers deserve that?

For some, it's the only job they know.

And sorry, but saying you don't care about GM also means, by extension, you don't care about thousands of GM workers and retirees.

[Ichingcarpenter]

5. They could have started to retool these plants years ago

I blame GM Management for their continued short sighted vision. The world and
many Americans saw this coming over 6 years ago. But General Motor's management said
"STAY THE COURSE", "DON'T CUT AND RUN"
FIGHT CONGRESS AGAINST RAISING CAFE STANDARDS,

They spent $300 million in 2004 to beef up their plant builds the engines for their SUVs.

GM To Invest $450 Million In Two Flint, Michigan Plants

December 16, 2004

FLINT, Mich. - General Motors today announced plans to invest a combined total of approximately $450 million in two of its Flint, Mich. manufacturing plants, further strengthening a key GM manufacturing center. In the last five years, GM has invested more than $20 billion in its U.S. operations.

The company plans to invest approximately $300 million to expand its Flint Engine South plant for production of GM's advanced global V-6 engine that will power a variety of future GM cars and SUVs. The plant is the sole producer of the award-winning inline Vortec 4200 six-cylinder engine used in GM mid-size SUVs such as the Chevy TrailBlazer and GMC Envoy.

Construction will begin prior to the end of the year on the Flint Engine South expansion. The expansion would add approximately 500,000 sq. ft. to the existing facility.

In addition, GM plans to invest approximately $150 million at its Flint truck assembly plant to refurbish the facility in preparation for future full-size truck products. The investment would be used for new machinery, tooling and equipment. The Flint truck plant builds the heavy-duty crew cab version of the Chevy Silverado and GMC Sierra full-size pickups. In addition, the facility builds the Chevy Kodiak and GMC Topkick medium-duty commercial trucks.

http://plastics.sabic.eu/news/_en/gmtoinvest4.htm

[Auggie]

15. Not just GM. Nearly every automaker was chasing SUV sales.

As you point out, Congress could have forced the issue with higher mileage standards. They're to blame as much as anybody.

You have to love the irony of automaker's argument: "But, if we raise mileage standards it will cost jobs..."

Guess what happened anyway?

[DainBramaged]

22. Toyota predicted that SUV sales would INCREASE this year, they were wrong

And they are trying to make the dealers take the dead iron anyway.

http://wot.motortrend.com/6244436/auto-news/toyota-inventories-mouting-as-truck-suv-sales-sag/index.html

Toyota inventories mouting as truck, SUV sales sag

Toyota and Scion dealers are facing record high U.S. vehicle inventories as a result of consumers' unwillingness to buy the abundant stock, which is comprised mostly of SUVs and trucks. As reported by Automotive News, the Japanese automaker has an inventory of roughly 376,000 vehicles -- up 100,000 units from last year.


The 58-day inventory is smaller by comparison to those of Dodge, Ford and Chevrolet, but has resulted in Toyota's bigger vehicle turndown pool. Toyota's national pool consists of cars and trucks that dealers refuse to claim, due mostly in part to the difficulty in selling the specific model.

Vehicles allocated to the turndown pool have historically been offered back to dealers at a reduced price. Even recently redesigned vehicles like the new Tundra and Sequoia aren't moving from the pool and have been hit hard as gas prices continue to soar to record highs and the economy falters.

A few number of smaller market Toyota dealers that usually carry a limited inventory are making out happily, as they now have an opportunity to grow as a result of the bursting turndown pool.

Toyota officials in the past have addressed high inventory amounts with the persistent implementation of factory incentives combined with reductions in manufacturing.

[Doctor_J]

6. Didn't we have this same headline a month ago?

How many "deep cuts" can they have before they cut through an artery?

[red storm]

7. Headlines in Dayton, Ohio is GM is expected to close.

"GM to close Moraine assembly plant
Staff Writer

Tuesday, June 03, 2008

MORAINE — General Motors Corp., will cease operations at its sport utility vehicles assembly plant on Stroop Road in Moraine, the company told workers in an internal announcement today, June 3.

The employee who did not wish to be identified said the company will cease operations with the 2010 model year or sooner as the market indicates."

Our economy here is in the toilet and it isn't going to get any better.

[Delphinus]

16. Welcome to DU red storm.

I sympathize with you and the economy you are experiencing. :hug: It sucks in so many places right now. I wish we could find a better way of living upon this earth.

[Lone_Star_Dem]

26. Welcome to DU, red storm!

:hi:

Hopefully some day in the future the industry will restructure in such a way as to actually provide what is needed by consumers. Which will in effect create more jobs and more consumers again. Not that this is much comfort to the workers losing their jobs now due to the poor management. :(

[Lone_Star_Dem]

24. I believe a month ago it was Ford

Now GM is following in their footsteps. It was inevitable and avoidable if they would have addressed the issue previously.

[eilen]

53. They just had a reduction

of a third of their workforce by voluntary buyout, now they are laying more people off-- 5-6 factorys worth? So they are effectively losing about another sixteenth of their original workforce.

I feel very badly for the employees affected.

[madmom]

8. wonder if any of these cuts include the multi-million $ package Wagoner got !

[Zynx]

44. Wagoner should be jailed for criminal incompetence.

[primavera]

57. Now that's what I keep wondering

When are we going to stop firing workers and start firing the assholes who got the American auto industry into this mess? But no, at the executive level, criminal incompetence earns one a $50 million bonus. And people in this country worry about government corruption and inefficiency?!

[SpiralHawk]

9. The fruit of Republiconomics

freaking borrow-and-spend so-called 'conservatives' have totally trashed America's economy, and placed our children and grandchildren in in-debted servitude to the 'godless red commie Chinese.'

Ptoooey.

[davepc]

11. The joke on GM is that if they didn't kill off the EV-1 they'd probably be dominating right now.

[Delphinus]

13. This is what I find encouraging:

Wagoner announced the moves in response to slumping sales of pickups and SUVs brought on by high oil prices. He says a market shift to smaller vehicles is permanent.

Why in the hell it took them so long to wake up is beyond me, but it looks like they have.

[Auggie]

17. They milked the large vehicle market because the profit margin was greater.

[davepc]

19. and the CAFE standards didn't apply to a lot of vehicles over a certain weight.

[Auggie]

28. Right -- another fabulous blunder!

[Ichingcarpenter]

32. Meanwhile they invested millions in manufacturing the same engines

for those SUVs

[primavera]

59. Therein lies the problem, alright

I was reading recently about corporate practices in Germany and the extent to which German companies, including publicly-traded ones, re-invest their profits back into their companies, in some cases as much as 80% of profits being funneled back into the company. In contrast, US companies seem to greedily seize upon any endeavor, no matter how ill-advised, that will yield a quick buck and allow them to boast a higher profit margin to shareholders and give their CEOs a $50 million bonus for the year. Why is it that German shareholders will support companies which engage in more responsible business practices at the cost of producing lower short-term yields, while Americans won't? Is it a cultural thing that we're so much more tolerant of greed-inspired slash & burn business practices? Or is an institutional/structural defect in our economy?

[natrat]

48. old stupid republican men?

[Phred42]

20. When will SOMEONE (StockHOLDERS?) Realize that the on;y way to SAVE GM

IS DEEP CUTS in Senior Management and on the BOARD OF DIRECTORS.

They have utterly FAILED at defining direction for the Company for 25 years

[KillCapitalism]

23. GM better hope the Volt os a hit.

They need the Volt to succeed just to stay in the game.

[natrat]

49. it is one ugly looking car

[AndyTiedye]

33. Was GM At Those "Energy Task Force" Meetings in 2001?

The ones where they were going over maps of Iraq's oil fields.

I'm thinking they built all those SUVs to burn all that cheap gas that Cheney told them would be forthcoming after they "Shocked and Awed" Iraq into submission.

[AndyTiedye]

34. Can They Retool Those Plants to Build Buses or Railcars?

USA Today: Ridership on Mass Transit Breaks Records

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3379025

[Auggie]

40. They used to have a locomotive unit -- but they sold it in 2005

In June 2004, The Wall Street Journal published an article indicating that EMD was being put up for sale. On January 11, 2005, Reuters published a story indicating that a sale to "two private U.S. equity groups" was likely to be announced "this week".

Confirmation came the following day with a press release issued by GM. General Motors has agreed to sell its Electro-Motive Division to a partnership led by Greenbriar Equity Group LLC and Berkshire Partners LLC. The newly spun-off company is called Electro-Motive Diesel, Incorporated, which retains the EMD brand that is so widely known in the railroad industry. The sale closed on April 4, 2005.

Link: http://en.wikipedia.org/wiki/Electro-Motive_Diesel

-------------------------------------------------

My goodness -- that company is just one big fuck-up

[Algorem]

38. might discontinue hummer?

that's gonna be frustrating.

[AngryOldDem]

39. Here is what the economy is already like in one city affected by this news.

Cross-posted from Ohio forum:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=172x24353

Moraine is a solidly blue-collar town just south of Dayton that has lived and breathed GM for decades. Businesses there rely on GM, many of its residents work there and the housing is well within reach of their incomes.

Many small businesses almost closed up permanently when the plant was idled by the American Axle strike. The strike was settled just in time. Now this.

More to the point, this is the last nail in the coffin to Dayton, Ohio's manufacturing base. IT and other companies have left, or are in the process of leaving the area. There are no feasible plans for any kind of reinvention or revitalization because there is little to no regional cooperation, and a poor city government structure in Dayton.

The only thing left now is nearby Wright-Patterson Air Force Base. Otherwise, this area is dead.

[hunter]

41. They could transform their SUVs into buses and streetcars...

Maybe even do a bit of remanufacturing of all the fuel hogs that people are getting rid of.

An H2 or Escalade could be converted into a vehicle that carries twenty or thirty people.

[Release The Hounds]

42. .

http://www.msnbc.msn.com/id/24947044/page/2/

"The announcement is an economic blow to Janesville, which long has been entwined with automaking. The sprawling GM plant has survived the Depression, a world war and GM’s major layoffs in the 1980s"


...but not the * Administration.

[PeaceNikki]

46. U.S. Sen. Russ Feingold (D-Wis.) issued the following statement:

(Janesville is his hometown)

"For generations, the people of Janesville have poured their heart and soul into General Motors and have proven to be an incredible asset for the company. GM should immediately take steps to ensure the continued success of the GM plant, including retooling the plant for new production lines. I will continue to work with Gov. Doyle, Sen. Kohl, Congressman Ryan, state and local officials, related businesses, and the leadership of GM to do all I can to support an ongoing and vital GM presence in Janesville. The people of Janesville have worked too hard for too long to deserve anything less."

[DainBramaged]

47. I actually think he should find a way to fuck GM if they don't retool

I am very disappointed in GM management.

[PeaceNikki]

50. I believe that he will work VERY hard to keep some jobs there.

He's got very deep roots in Janesville and he's very committed to his constituents.

[mochajava666]

55. The talk in the Janesville grocery store is heartbreaking

I hope Feingold can keep the plant going by retooling. Our Governor is talking a lot about retraining. What retraining can be done for a 50 year old that will replace his GM job? Good paying jobs are scarce everywhere and Janesville has been losing companies right and left. There will be a huge ripple effect as other businesses linked to GM and its workers relocate or go under.

[Tight_rope]

56. Fuck GM...stupid bastards had years to figure this shit out..

But the CEO's were too stupid busy thinking about how to build bigger cars so they could get richer. I hope they have to file personal bankruptcies because their spoiled wives and children don't know how to economize. They make me :puke: everytime I see a Hummer.

[polticalpout]

58. Fuck GM = Fuck American Workers, /nm

/nm

[AngryOldDem]

61. Unfortunately, the ones filing for bankruptcy will most likely be those men and women on the line.

As well as retirees.

The execs will be fine. They always are.

[Jimbo S]

63. Plenty of blame to go around

Idiot management for mass producing SUV's for the sake of short-term profits. Sacrificing the future to live in the present.

Top-heavy management. Shitcan half of them and put the other half to work.

The UAW. I've seen one post out of two threads that even dares to mention labor. Militant attitudes, casual work ethic, all the red tape and hurdles they put out would put any company out of business. Even if GM focused on making common sense cars they would have trouble breaking even given the obstacles they face.

Retiree health benefits. A benefit won fair and square during negotiations some 30 or 40 years ago, so really no blame there. Just a fact. I hear something like $1000+ on the price of every vehicle goes to retiree health. Probably doesn't help that the typical factory worker isn't going to be the most health-conscious person.

Consumers. Buy a foreign vehicle, that's American dollars and American jobs that go away.

Sometimes dealing with American automakers is like dealing with the mafia. Any shit they have to deal with gets passed down to the suppliers and nothing no one can do. They never needed to look internally. Now they do.

[Overseas]

69. How hard did they lobby for national health insurance?

Since we have a "free market" system, how hard did the automakers lobby for national health insurance to bring their expenses into line with their international competitors? Instead, I heard industry PR folks talking about how much of a hindrance health insurance costs were and pushing the labor unions to accept lower benefits. The fact that the automakers and other manufacturers in the USA did not lobby intensely for national health insurance to reduce their production costs is a clear demonstration for me that we do not have a free market.

We can't say US automakers didn't know consumers would want higher mileage because in the 70's we were all competing to see whose car got over 30 mpg, and 40 mpg was even cooler. It did not take extraordinary genius to understand petroleum was a limited resource that would become more expensive with scarcity. But the automakers did not lobby for CAFE standards. Instead of evolving more efficient cars they went careening off to suicide ridge on the rampage of consumption ushered in by the Reagan administration, allowing other countries to take the lead in energy efficiency.

And workers are left to pay the costs of the deliberate and destructive ignorance of the auto makers.